By Gina Lee
Investing.com – Chinese imports grew at their fastest pace in a decade in May, boosted by the recent surge in commodity prices. However, export growth was lower than expected in the same month.
Trade data released by the National Bureau of Statistics earlier in the day showed that imports grew 51.1% year-on-year, just below the 51.5% in forecasts prepared by Investing.com but above April's 43.1% figure. The growth was the fastest since January 2011.
Meanwhile, the data also said that exports grew 27.9% year-on-year, below both the 32.1% in forecasts prepared by Investing.com and April’s 32.3% figure. The trade balance stood at $45.53 billion, below the $50.5 billion in forecasts prepared by Investing.com but above April’s $42.86 billion figure.
A recovery in demand in developed markets such as the U.S. continued to boost China’s economy, alongside COVID-19 disruptions in other manufacturing nations that also gave exports a boost. However, exporters faced the challenges of higher raw material and freight costs, logistics bottlenecks and a strengthening yuan.
Prices for commodities such as coal, steel, iron ore and copper have climbed in 2021, thanks to easing COVID-19 restrictive measures alongside abundant liquidity globally.
The yuan has also extended a recent rally that saw it climb to near three-year heights against the dollar. The Chinese currency’s strength has yet to make a dent in the country’s trade surplus but could mean continuously higher prices for U.S. consumers.
U.S. President Joe Biden’s administration is also currently reviewing the U.S.-China trade policy ahead of a Phase One deal expiring at the end of 2021.