China exports up on global demand in May

China's exports picked up in May, on firmer global demand, according to data published on Sunday. However, an unexpected fall in imports indicated weaker domestic demand that could continue to weigh on the world's second-largest economy, Reuters reports.

Exports were up 7 per cent in May from a year earlier, accelerating April's 0.9 per cent rise, while imports slipped 1.6 per cent, against an increase of 0.8 per cent in April, according to the General Administration of Customs.

The country's trade surplus increased sharply to $35.9 billion in May from April's $18.5 billion, according to the customs office.

"We do not think the May trade data will change the policy stance significantly," Louis Kuijs, an RBS economist in Hong Kong, said in a note.

"While the export data are reasonably positive, the weakness of domestic demand implied by the import data may keep the pressure up for initiatives to support growth," he said.

According to Chinese commerce ministry's projections, the trade picture of the country could brighten in May, as base efforts faded and government support measures kicked in.

According to analysts, the weak trade figures had partly led to an inflated comparison base against last year due to fake invoicing of exports to beat currency restrictions. However, authorities had cracked down on such activities since May of last year.

Meanwhile, China's daily crude oil imports retreated in May, having hit a record high in April, with refining capacity falling the most this year due to maintenance, Bloomberg reports.

Net overseas purchases stood at 26.08 million tonnes, data released by the general administration of customs in Beijing at the weekend showed.

This was around 6.17 million barrels a day, falling from a record 6.81 million in April.

Crude-processing capacity in China, the second-largest oil consumer in the world, was down 3.93 million tonnes in May, the sharpest plunge this year, according to ICIS-C1, a commodities researcher based in Shanghai.

The decline was even greater than in April, when capacity declined 3.1 million tonnes with over 80 of the nation's biggest refineries taken offline.

Plants in China follow a second quarter maintenance regime before fuel consumption peaked during the northern summer.

PetroChina Company halted operations at the Dalian refinery, its largest by capacity at 20 million tonnes a year, from 10 April to 24 May to carry out seasonal repairs.

China Petroleum & Chemical Corporation, known as Sinopec, closed the 11.5 million-tonne Changling plant from 18 March to 15 May and was carrying out upgrading and expansion work at its 8 million-tonne Shijiazhuang facility between April and July.