Econintersect: China had the largest trade surplus in more than five and a half years in May. The value was $359.2 billion increasing 7.2% year-over-year and 
up almost 100% from April. Except for five months in the second half of 2008, this is the largest trade surplus in history. Exports rose by by 7% year-over-year while imports contracted by 1.6%. Except for Japan exports showed strong month-over-month increases to all major trading partners. The EU and Taiwan had the largets increase (13.4% and 14.7%, respectively) while sales to China’s largest trading partner, the U.S. grew by 6.3%. Sales to ASEAN countries were up by 9.1% but Japan increased by only 2.2%.
Some analysts are discounting the surge in exports as a one-off event. The logic of that argument is that the decline in imprts indicates a sluggish economy and is not what would be expected for exports entering a persistent period of strength. Econintersect is reminded that in the first few months of 2013 export numbers were being padded with fake invoices. These were being used as a means to provide conduits for “hot money”. Could something like that be happening again?
Sources:
- China exports show rising global demand (Demetri Sevastopulo, Financial Times)
- China’s Export Gains to Cushion Growth as Imports Slump (Nerys Avery, Bloomberg)
- China Balance of Trade (Trading Economics)
