Surge in Chinese Trades Amid Weakened Economic Growth

Reports indicating China is gaining momentum in the economy as both exports and imports rallied in May, denoting an improvement in the economy. Exports climbed to $191billion gained 8.7 pc while imports rose to $150.2 billion gained 14.8 pc. It exceeded the expectation of 7.2 pc and 8.3 pc for exports and imports respectively. On the other hand, the trade surplus grew $2 billion to $40.8 billion in April.

However, concern arises that it would be difficult for Beijing to sustain the current pace. Future trade data could hamper growth aiming to curb the large debt of the country. A sluggish credit growth amid weak economic activity in the succeeding quarters will affect progress, warned by an economist. Other data also reflects weakened growth with the ongoing weaker demand and surplus in industrial capacity because of debt-driven infrastructure.

Concerns about increasing debt levels prompted Moody’s agency to cut its Chian credit rating for the first time in almost 30 years. In 2016, its economy growth was at its weakest rate and it is anticipated that growth will further weaken this year.