China's Trade Surplus Jumped to a 3-Month High as Exports and Imports Growth Diverged

Li Chen
07 Jun, 2024
Hong Kong

Better-than-expected exports in May failed to sway investors, as the focus remained on the health of the domestic economy. 

Market indexes in Shanghai and Hong Kong traded down after the increase in imports slowed sharply, indicating weak domestic demand. 

For the week, the CSI index is set to close down 0.7%, and the Hang Seng index is expected to close up 0.1%. 

 

China Trade Surplus Advances to a 3-Month High

China's export growth accelerated in May to 7.6% to $302.4 billion, according to data released by the customs agency on Friday. 

Imports growth slowed to 1.8% in May from 8.4% in April, signaling ongoing domestic market weakness led by property market malaise. 

Economists attributed the sharp jump in exports to the low base in the previous year and sustained demand in the ASEAN member countries. 

Exports accelerated from the annual decline of 7.5% in March to a 1.5% increase in April. 

China's exports reversed the decline of 7.5% in the corresponding month of the year.

China's monthly data have been volatile in recent years as the second-largest economy battles on several fronts, including rising geopolitical tensions, severe margin pressures, and shifting supply chain linkages. 

China's trade surplus soared to a three-month high of $82.6 billion in May from $72.4 billion in April and $65.6 billion in the corresponding month a year ago. 

Exports to the Association of Southeast Asian Nations soared 22.5%, to the U.S. by 3.6%, but to Russia they fell by 2%. 

Passenger car shipments soared 16.6%, integrated circuits advanced 28.5%, and hi-tech products rose 8.1%. 

 

China Stock Movers 

The CSI 300 index decreased 0.7% to 3,566.50, and the Hang Seng index declined 0.2% to 18,399.04.

Nio declined 7.5% to HK$38.25 after the electric vehicle maker posted a loss in the first quarter, indicating a brutal price war. 

Li Auto declined 2.5% to HK$76.95, BYD decreased 1.2% to HK$226.40, and Xiaomi fell 2.4% to HK$17.54. 

Contemporary Amperex Technology, the largest maker of lithium-ion batteries for electric vehicles, declined 7.1% to ¥190.24 in Shenzhen trading on the worry that the company is likely to face U.S. sanctions. 

Three companies completed their initial public offerings, listing two on the Hong Kong Stock Exchange and one on the Shenzhen Stock Exchange. 

Jiangxi Rimag Group inched up 3% to HK$15.39, Easu Technology Holdings advanced 73% from its IPO price to HK$9.97, and Ningbo Lian Technology soared 425% to 148.96 yuan in Shenzhen.