Contrary to popular anticipation, Chinese exports record another stellar month of growth as the global economic outlook improves.
According to a poll released on the last day of the workweek, international orders should make a 32.1% hike in May year-over-year. This likely result extends the positive momentum incurred in April, both garnering more than 30% growth. Such a result is contrary to the sluggish performance of the country’s manufacturing Purchasing Managers’ Index during the same period.
Chinese factory activity in May stood at 51.1%, just a little above the critical threshold of 50 points. Although it still sat under the column of expansion, economists are apprehensive whether this already signals a looming contraction soon.
Meanwhile, imports came more robust during the month at a 51.5% hike versus the same period last year. It is also significantly higher than the average consensus, just a little above a 40% boost.
It was around the same period that the government resorted to the adoption of draconian lockdowns across its important business hubs for the record. The decision carried through and primarily affected the appetite for consumer spending, especially on internationally sourced goods.
Experts noted the rising commodity prices would remain the primary driver of the uptrend in the remaining months of 2020.
Since the start of the year, energy, metal, and agricultural commodities hit record-high prices as demand started to outsmart supply.
During the week, gold managed to notch a tough resistance to crack of $1,900.00 per ounce. Consequently, the copper price never left record-high. It traded at a multi-year high above $11,000.00 a tonne at one point in the Shanghai Metal Exchange.
Port Congestion Affected by Revitalizing Trade
Along with the positive import-export health in the country, port congestion in the country’s Yantian entrepot has been spotted. Should this trend continues, the situation could pose problems for the global supply chain.
The Yantian International Container Terminal is in Shenzhen province. It an important link that connects China to Europe and the United States.
By the end of last month, more than 20,000 containers are on stand-by for exports in the port. However, an estimate by a world-leading shipping company could take up to two weeks before outbound shipments could go on a sail. With this, Yantian port announced earlier that it would not be accepting containers for exports for the time being to deal with the case at hand.
Aside from record-high volumes from delayed shipments from last year, another reason for the congestion is the adherence to health and safety protocols.