China's exports showed some improvement in May while imports slumped further, painting a still disappointing picture for trade in the world's second-largest economy, according to the General Administration of Customs.
Exports dropped 2.8 percent from a year earlier to 1.17 trillion yuan ($188.7 billion) last month, recovering some ground from the contraction of 6.2 percent in April.
Imports lost 18.1 percent to 803.3 billion yuan, decelerating further from the fall of 16.1 percent a month earlier.
As imports underperformed, the trade surplus widened from April's 210.2 billion yuan to 366.8 billion yuan, up 65 percent year on year.
"China's trade data disappointed again," said Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd. "Although exports improved, imports failed market expectation by a large margin, indicating still lukewarm domestic demand."
ANZ economists attributed the slump in imports to lower commodity prices and the "exchange rate effect," suggesting the impact of a stronger Chinese yuan.
"In our view, both consumption and investment are bound to pick up in the second and third quarters on faster implementation of fiscal policy and much eased monetary policy," Zhou said. "Furthermore, the Ministry of Finance has reduced tariffs on various consumer goods. Thus, we may see a modest pick-up in Chinese imports soon."
Starting this month, China cut import tariffs by up to 50 percent for a range of consumer goods that included skin-care products, diapers, boots and suits to boost domestic consumption.
The State Council also released a document last month saying that the country aims to expand trade relations with more countries and regions, and will further raise the quality and variety of exports to make China more competitive.
According to the document, trade by 2020 should include a combination of products, services, technologies and capital, instead of mainly goods. Also, low prices and preferential policies will play less important roles in getting deals, while the country will try to have a louder voice in making rules for global trade.
"We should develop from a big trader to a strong one," the document said.
The yuan's exchange rate has stayed comparatively stable in recent months.
"We maintain our view that the yuan is likely to remain steady before the IMF decides on whether to include the currency into Special Drawing Rights at the end of this year," Zhou said.
The Customs said trade fell 7.8 percent to 9.47 trillion yuan in the first five months, compared to the official target of a 6 percent increase for the year.
Exports managed to expand 0.8 percent in the January-May period to 5.4 trillion yuan, while imports lost 17.2 percent to 4.07 trillion yuan, doubling the trade surplus from a year earlier to 1.33 billion yuan.
China's bilateral trade with the European Union, its biggest trading partner, waned by 7.1 percent during the period, while that with the United States, the second largest, rose 2.8 percent. Trade with Japan fell by 11.2 percent.
Shanghai's trade declined 4 percent to 1.1 trillion yuan in the first five months, ranking after Guangdong and Jiangsu provinces in value terms.
