China’s Trade Surplus Reached a Record High in May

In May 2020, China’s exports and imports remained on a downward path, dropping by 3.3% y/y and by 16.7% y/y, respectively. With the exports worth USD 206.8bn and imports - USD 143.9bn, China recorded a USD 62.9bn trade surplus, the highest level since 2000.

The decrease in May exports was less steep than the expected, suggesting the external demand is not so weak. The drop was mainly driven by weaker demand of refined petroleum products, leather products, fertilizers, clothes and footwear, as the COVID-19 pandemic continued to hurt business activity. On the other hand, plastic goods, high-tech products and medical products had positive contributions. Exports of these products rose by 54.4% y/y, 7.8% y/y and 4.7% y/y, respectively, as the supply shortage caused by large scale lockdowns globally brought orders of medical-related products to China. 

Imports fell by 16.7% y/y in May, more than expected, and indicating negative market expectations. The decrease in imports was mainly driven by the plunge of oil prices and commodity prices related to subdued manufacturing activity. Specifically, the import of crude oil and refined petroleum products plunged by 52.6% y/y and by 41.6% y/y, respectively. 
 

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