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2011-06-10 10:33:08
Workers at a factory in China Low-cost manufacturing has turned China in to the
biggest exporter in the world.
The pace of growth of China's exports slowed down in May suggesting that demand
in its key markets may be faltering.
Shipments from the mainland grew by 19.4% in May, compared with the same month
last year, according to China's customs agency.
The number is a sharp decline from a 30% annual surge seen a month earlier.
Meanwhile, imports grew by 28.4%, resulting in a weaker-than-expected trade
surplus of $13.1bn ( 8bn).
Analysts had forecast a surplus of $18.6bn.
They said the surprisingly weak numbers suggest the global economic recovery
still remains volatile.
"Looking at export figures, they grew at a slower clip last month, indicating
there are still uncertainties hanging over the world recovery," said Chen Yong
of Huatai Securities in Shanghai.
Ken Peng of Citigroup warned that growth in China's trade may slow down even
further.
"I wouldn't be surprised if next month showed softer numbers," Mr Peng said.
Rebalancing trade
Start Quote
We expected imports to fall a bit deeper on falling global commodity prices and
slowing investment in China
End Quote Eliza Liu CCB International
China's economic growth has been powered by a boom in its exports sector.
The country is the world's second largest economy and its biggest exporter.
However, as export demand from key markets like the US and Europe slows, China
has instead been looking to boost domestic demand to sustain growth.
Analysts said that even though the export numbers for May were weak, the growth
in imports has been encouraging.
"Imports were strong and on par with last month in terms of absolute value,
which shows that China's domestic demand remains strong," said Xu Biao of China
Merchants Bank.
"In past years, May imports were often smaller compared to April's," Mr Xu
added.
The fact the imports grew despite the volatility in global commodity prices
shows that domestic demand remains string, according to Dr Eliza Liu of CCB
International.
"We expected imports to fall a bit deeper on falling global commodity prices
and slowing investment in China," Dr Liu said.
"It turned out things were better than we thought."