China’s exports likely to have gained marginally in May

China’s exports are likely to have grown just a tad in May. China’s exports had fluctuated in the beginning of 2016. Growth in exports had contracted in USD terms in April. External demand has not strengthened further in May, while rebound in Korea’s export growth was more subdued that it seems given the strong positive base effects.

Also, manufacturing PMI of China shows that export orders likely declined marginally. Hence, on a sequential basis, exports are expected to have gained just marginally in May, said Societe Generale in a research report. However, the headline figures are expected to have fallen further into negative territory due to a negative base effect.

Meanwhile, imports are likely to have rebounded slightly. Imports for re-exports are expected to have improved slowly. Domestic recovery is unlikely to aid imports, given the large excess capacity in the country’s industrial sector.

“Given a mom increase in exports but a decline in imports, the trade surplus probably rose in May to $59bn from $46 in April”, noted Societe Generale.