The Blubber

For the first time since February, China's outbound trade experienced a downturn in May, as revealed by customs data on Wednesday.

The year-on-year exports plummeted by 7.5% to a total of $283.5 billion, a figure significantly below the 0.4% decrease projected by a Reuters survey.

In May, Chinese exports saw a decline for the first time in a quarter, escalating the economic risks for the globe's second-largest economy amidst a weakening international demand.

Official data released on Wednesday indicated a 7.5% contraction in overseas shipments in dollar terms compared to the previous year, a figure considerably worse than the anticipated 1.8% fall. Imports also saw a decrease, falling by 4.5%, which was, however, better than the predicted 8% drop, resulting in a trade surplus of $65.8 billion.

The surge in exports earlier this year served as a silver lining for the economy, bolstering the recovery after China lifted its pandemic-related restrictions. However, recent data suggests a slowdown in this recovery, with a contraction in manufacturing activity in May and a deceleration in home sales growth following an earlier surge this year.

While the trade data from the previous month may have been influenced by the comparison base from the prior year, it also indicates a softer global demand. Economists are predicting a contraction in China's exports for this year.