Beating expectations, China's exports in May jumped 7.6 per cent year-on-year to $302.35 billion, as per customs data. This growth comes despite ongoing trade tensions with major economies like the US and Europe. While exports thrived, imports witnessed a slowdown, growing by only 1.8 per cent to $219.73 billion, falling short of analyst predictions of around 4 per cent growth. This resulted in a wider trade surplus of $82.62 billion for China.

Stronger textile and apparel performance expected

While specific data for the textiles and apparel sector wasn't included in the report, the overall export growth suggests a positive performance for these sectors as well. Textiles and apparel have historically been a significant portion of China's exports, and analysts predict continued strength due to:

Lower base effect: Textile and apparel exports dipped in May 2023, providing a lower benchmark for comparison and potentially inflating the May 2024 growth figures.

Shifting trade patterns: With rising tensions between China and some traditional trading partners Chinese exporters may be focusing on new markets in Southeast Asia and other regions, potentially boosting textile and apparel shipments to these areas.

Growth in specific destinations

The customs data did shed light on geographical trends in China's exports:

ASEAN: The 10 nations of the Association of Southeast Asian Nations remained the top destination for Chinese goods, with exports growing 9.7 per cent year-on-year in the January-May period. This suggests a growing market for Chinese textiles and apparel in Southeast Asia.

US and EU: Exports to the US grew a meager 0.2 per cent in the first five months of 2024 compared to the same period in 2023. Shipments to the European Union declined by 3.9 per cent. These figures indicate a potential decline in textile and apparel exports to these traditional markets due to trade tensions.

The reasons behind China's May export growth are complex. A low base effect from 2023 likely played a role, alongside factors like a weaker Chinese currency and businesses rushing shipments ahead of potential tariff hikes.

While the data suggests continued strength in the textiles and apparel sector, a more comprehensive analysis awaits a detailed breakdown of industry-specific export figures. Regardless, China's export performance in May highlights the country's ability to adapt to a changing trade landscape.