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China trade data in surprise sign of strength

Category: Business

Published: 11th Jun 2012 03:04:05

China's export growth has increased while inflation has slowed, in a sign of strength in the world's second-biggest economy.

In May, exports jumped 15.3% from a year earlier, beating expectations. In April they were up by 4.9%.

However, industrial production and retail sales data continued to disappoint.

Analysts said while the trade data was a positive, Chinese authorities would continue measures to stimulate growth.

"The domestic economy is slowing quite substantially," said Alistair Thornton from IHS Global Insight in Beijing.

"That will feed through into imports over the next few months, so this is likely to be a bit of an aberration rather than a new normal".

He warned against reading too much into the monthly trade data, especially since other figures painted a much bleaker picture of the domestic economy.

Industrial output rose 9.6% in May from a year ago, which was below expectation.

Retail sales also came in below estimates, growing at their slowest pace since February 2011.

China's central bank cut interest rates on Thursday for the first time in more than three years in an effort to boost growth on worries of a slowdown.

"We had some pretty dismal data out yesterday, and it came off the back of an interest rate cut which really signals that policymakers are extremely concerned about the state of the economy," Mr Thornton said.

Consumer inflation in May slowed to 3%, the statistics bureau said. That is well below the government target of 4% for 2012.

Analysts said this would give policymakers room to further ease policy and spur growth.

Source:
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BBC News, 2012. China trade data in surprise sign of strength [Online] (Updated 11th Jun 2012)
Available at: http://www.ukwirednews.com/news/1433743/China-trade-data-in-surprise-sign-of-strength [Accessed 23rd Apr 2014]

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