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Total foreign trade volume grew 0.4 per cent year on year last month to $345.1 billion, a significant pullback from the 15.7 per cent gain in April, the General Administration of Customs said on Saturday.
Exports rose by only one percent year on year to $182.77 billion, while imports declined 0.3 per cent to $162.34 billion, leaving China with a surplus of $20.43 billion.
The export data came in much lower than market expectations.
“The May data reflected China’s recent crackdown on hot money inflow”, noted Chang Jian, a China economist with Barclays Capital.
She said whether the weaker-than-expected data would lead to loosening policies needs to be reviewed with other key industrial data due on Sunday.
“The government would be very concerned. But I think the new leaders have lower bottom line of GDP growth at around 7 per cent, compared with the 7.5 per cent rate that we previously expected,” said Chang.
In the first five months of 2013, China’s foreign trade expanded 10.9 per cent year on year.