China's Trade Surplus unexpectedly rose in May Options

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China's Trade Surplus unexpectedly rose in May

http://ceconomy.blogspot.com/

China is probably using export to offset the weakness in domestic demand.

China's exports and imports both rose sharply in May, a hopeful sign for the world's second-largest economy, especially after alarmingly weak trade data in April.

Exports rose 15.3% in May from a year earlier, China's General Administration of Customs said in a statement on Sunday. That is up from growth of just 4.9% in April, and also well above expectations for a 6.9% rise, according to an earlier Dow Jones poll of economists.

Imports rose 12.7%, compared with April's 0.3% increase, and economists' expectations for a 3.0% rise.

Economists reacted cautiously to the data, warning against reading too much into the strong figures.

"The fact that it is stronger than expectations is relatively positive news, but that should be caveated by the fact that monthly trade data is very volatile from month-to-month," said IHS Global Insight economist Alistair Thornton.

He warned that exports could fade in the coming months on economic turbulence in Europe, China's largest trading partner.

"It is doubtful that growth in exports and imports can keep up such a fast pace in the coming months," said Li Huiyong, an economist at Shenyin & Wanguo Securities, a local brokerage.

The monthly trade surplus rose slightly, to $18.7 billion in May compared to $18.4 billion in April. Economists had expected the surplus to decline to $17.8 billion.