China reports trade surplus for June as exports jump
China posted its second monthly trade surplus in June as exports surged higher than expected 46.5% from a year earlier. The Commerce Ministry said June exports amounted to $50.5 billion while imports were up by 50.5% to $48.65 billion. The figures mark a sudden surge in annual growth of imports and exports, which had slowed down recently regarding government measures to prevent over-investment in certain parts of the economy. The annual growth of imports was a big surprise for analysts, as they expected imports to grow between 28-40%. Analysts expressed that the rapid increase in imports could be due to oil purchases, but if it was because of continued demand for steel and iron ore, then it would raise questions over whether a recent slowdown in investment growth could be maintained. The growth in imports decelerated to 35.4% in May, allowing China to report its first monthly trade surplus. In May, China's steel products imports were recorded as 2.13 million tons with a decrease of 30.2% compared to the same period of last year. This was the lowest monthly level registered since 2003. The decline in raw material imports showed that the government's struggles to curb excess investment in targeted sectors like steel were working. However, analysts pointed out that they have been looking for more signs of proof that show whether measures taken by the government to slow import growth have been effective or not. The Commerce Ministry expects exports to increase by 15% in 2004 to $505 billion while imports were likely to rise by 20% to $495 billion. Accordingly, the trade surplus could be $10 billion for this year compared to $25.5 billion recorded in 2003. June trade surplus amounted to $1.84 billion compared to $2.14 billion of trade surplus in June 2003.