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China's exports fall to 3-month low in May, factory output's value down to 2-year low
Amid a trade war with the United States, China's exports in May fell to a three-month low and factory-gate deflation stood at its worst in two years. read more
China's May exports growth slowed to a three-month low as US tariffs slammed shipments, while factory-gate deflation deepened to its worst level in two years, heaping pressure on the world's second-largest economy on both the domestic and external fronts.
Exports expanded 4.8 per cent year-on-year in value terms in May, slowing from the 8.1 per cent jump in April and missing the 5.0 per cent growth expected in a Reuters poll, customs data showed on Monday, despite a lowering of US tariffs on Chinese goods which had taken effect in early April.
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Imports dropped 3.4 per cent year-on-year, deepening sharply from the 0.2 per cent decline in April and worse than the 0.9 per cent downturn expected in the Reuters poll.
Exports had surged 12.4 per cent year-on-year and 8.1 per cent in March and April, respectively, as factories rushed shipments to the US and other overseas manufacturers to avoid US President Trump's hefty levies on China and the rest of the world.
While exporters in China found some respite in May as Beijing and Washington agreed to suspend most of their levies for 90 days, tensions between the world's two largest economies remain high and negotiations are underway over issues ranging from China's rare earths controls to Taiwan.
Trade representatives from China and the U.S. are meeting in London on Monday to resume talks after a phone call between their top leaders on Thursday.
China's May trade surplus came in at $103.2 billion, up from the $96.18 billion the previous month.
Beijing in May rolled out a series of monetary stimulus measures, including cuts to benchmark lending rates and a 500 billion yuan low-cost loan program for supporting elderly care and services consumption.
The measures are aimed at cushioning the trade war's blow to an economy that relied on exports in its recovery from the pandemic shocks and a protracted property market slump.
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Deflationary pressures
Producer and consumer price data, released by the National Bureau of Statistics on the same day, showed that deflationary pressures worsened last month.
The producer price index fell 3.3 per cent in May from a year earlier, after a 2.7 per cent decline in April and marked the deepest contraction in 22 months, while consumer prices extended declines, having dipped 0.1 per cent last month from a year earlier.
Cooling factory activity also highlights the impact of US tariffs on the world's largest manufacturing hub, dampening faster services growth as suspense lingers over the outcome of US-China trade talks.
(This is a wire copy. Except for the headline, the copy has not been edited by Firstpost staff.)
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