China has posted an unexpected surge in exports and imports in May, indicating strong improvement for the world’s second biggest economy and a close trading partner of the UK.
Rising lending rates and an unstable property market have dampened China’s markets in recent months, with Moody’s Investors Service downgrading its credit rating in May.
However, strong growth in trade figures suggests the economy is holding up better than widely expected.
Data shows that exports rose 8.7 per cent year-on-year to £191 billion (£147 billion), while imports rose 14.8 per cent from a year earlier to £150.2 billion (£118 billion).
Imports were driven largely by iron ore and other commodities to fuel a nationwide construction boom, while exports were helped from several years of improving global demand.
Capital Economics’ Julian Evans-Pritchard said: “The current strength of imports is unlikely to be sustained if, as we expect, slower credit growth feeds through into weaker economic activity in the coming quarters.
“Export growth is also likely to edge down but should fare better than imports given the relatively upbeat outlook for China’s main trading partners.”
Recent years have seen the Chinese Government attempt to control the country’s unregulated and risky lending economy, while other measures have been put in place to cool heated home prices.