China’s Trade Surplus Drops in May

China's trade surplus last month shrank to $8.25 billion from $13.4 billion in May, the General Administration of Customs said on Friday. Economists had expected a surplus of $15.0 billion.

Although China's exports and imports both fell again in June the rates of decline were less severe than in May, providing further encouragement that the world's third-largest economy is recovering from its slump, with help from its massive $585 billion infrastructure spending program.

After seasonal adjustments for changes in the number of working days, exports rose 4.5 percent in June from May and imports rose 2.2 percent, Customs said. Year-on-year, exports fell 21.4 percent in June from a year earlier, an improvement over the 26.4 percent drop in exports in May, year-on-year. Imports also fell in June, by 13.2 percent from June 2008. That figure, too, was an improvement over May's 25.2 percent fall, and far better than January's record decline of 43.1 percent in China’s exports.

China's global trade surplus declined to only $8.2 billion, its second-smallest gap in many years. Last year's trade gap reached as high as $40 billion a month.

China's trade collapsed in late 2008, when global demand for its manufactured goods plummeted in response to the severe economic recessions. Next week, the government will report quarterly economic growth, and analysts are forecasting about 7 percent, year-on-year. That would be an improvement over first-quarter growth of 6.1 percent.

Contact Alan Field at afield@joc.com.