Chinese exports fell much faster than expected in May and imports declined, albeit at a slower pace, as factories struggled to attract overseas demand and domestic consumption remained weak.
While exports from the world’s second-largest economy fell 7.5% year-on-year in May, the sharpest drop since January after rising 8.5% in April. Imports contracted at a slower pace, falling 4.5% last month.
According to a Reuters poll, economists had expected exports to contract by just 0.4% and imports to fall 8%.
The official Purchasing Managers’ Index showed last week that Chinese factory activity contracted faster than expected in May due to weak demand.
The PMI sub-indexes showed that production turned back from growth, while new orders, including new export orders, fell for a second month.
After the Chinese economy beat expectations in the first quarter, analysts are now lowering their economic forecasts for the rest of the year as industrial production continues to slow amid still-weak global demand.
The government has set a modest GDP growth target of around 5% this year after failing to meet growth targets for 2022.