China’s Exports Tumble as Recovery Falters

China’s Exports Tumble as Recovery Falters

Chinese exports tumbled sharply in May in a concerning sign for global demand and for the recovery of the world’s second-largest economy.

• China’s exports fell 7.5% year over year in May, the first decline in three months, and much further than the 0.4% drop expected by economists. Imports continued to fall, with a 4.5% fall, but at a slower rate than the 7.9% decline in April.
• Previously, China’s gross domestic product (GDP) grew 4.5% in the first quarter, as the post-Covid rebound appeared to start well but recent data have pointed to a faltering recovery.
• Separately, the OECD raised its global growth forecast for 2023 to 2.7%, from 2.6%. in its latest economic outlook published Wednesday. It said China’s reopening following Covid restrictions has boosted global activity and lower energy prices are easing the pressure on households.

What’s Next: Despite the OECD’s slightly improved forecast, the export data are a bad indicator for global growth. They may, however, intensify the pressure on China to unveil a stimulus package.

—Callum Keown from barrons