© Reuters. FILE PHOTO: A staff member attends to visitors to an oven retailer at the China Import and Export Fair, also known as the Canton Fair, in Guangzhou, Guangdong province, China April 16, 2023. REUTERS/Ellen Zhang/File Photo
By Joe Cash
BEIJING (Reuters) – Chinese imports are expected to have contracted in May, despite a weak base last year as the Shanghai lockdown crippled the country’s biggest port, while exports likely fell for the first time in three months, according to a Reuters poll. show.
Inbound shipments to the world’s second-largest economy are expected to have fallen 8.0% year-on-year, following a 7.9% decline in April, according to median forecasts from 26 economists in the poll finalized on Monday.
Exports are expected to have fallen by 0.4% year-on-year compared to growth of 8.5% in April, reflecting weak global demand for Chinese goods and matching the poor performance of imports as the China brings in parts and materials from overseas to assemble them into finished products for export.
China’s trade data will be released on Wednesday.
The pessimistic outlook for exports suggests Chinese exporters have caught up on unfulfilled orders after the COVID-19-related disruptions last year and global demand is insufficient to support a recovery in outbound shipments.
Chinese factory activity shrank faster than expected in May due to weaker demand, the official manufacturing Purchasing Managers’ Index (PMI) showed last Wednesday, but a private sector survey published on Thursday tipped growth unexpectedly.
May’s official PMI sub-indexes showed factory output tipped into contraction on the back of the expansion, while new orders, including new exports, fell for a second month.
South Korean shipments to China, a leading indicator of Chinese imports, fell 20.8% in May, marking the 12th consecutive annual loss, but the pace slowed to the slowest in seven months.
China’s economy grew faster than expected in the first quarter due to strong consumption of services, but manufacturing output continued to lag amid persistently weak global growth.
Analysts are now revising their expectations for the economy down with Nomura and Barclays (LON:) both cut China’s 2023 GDP growth forecast
The government has set a modest GDP growth target of around 5% for this year, after narrowly missing the 2022 target.
(This story has been refiled to correct formatting of hyperlink in bullet points)
(Polling by Devayani Sathyan and Sujith Pai; Reporting by Joe Cash; Editing by Jacqueline Wong)