Chinese trade balance surplus expands less than expected in May ...

Chinese trade balance surplus confirms the economy to moderate in the 2nd quarter ...

China's economy issued today its report, showing that the trade surplus widened in May less than analysts' expectations, as the nation's imports growth accelerated more than expected, higher than the exports' advance. 

Trade surplus widened to $13.05 billion during the month of May, compared with the previous surplus of $11.42 billion in April, where the actual reading came lower than the anticipated surplus of $19.30 billion. 

Exports rose to 19.4% during the year ended May, from 29.90% a year earlier, and forecasts referred to 20.5%. On the other hand, imports (YoY) inclined 28.4% in April, more than the expected 22.0% and the prior reading of 21.80%. 

Meanwhile, the economic growth in China is expected to witness a moderating phase during the second quarter of this year as the government tightened monetary policy and cracked down its stimulus to cool inflation gains which caused an ease in manufacturing sector expansion. 

The most difficult problem that faces the Chinese economy is the rise in inflation as the rates are still above the Chinese government target for the fourth consecutive month in April after China's consumer price index (CPI) accelerated near the fastest pace in more than two years, which supported monetary policy makers to hike the rates by 25 basis points to 6.31%. 

High inflation rates are considered a threat to economic growth experienced by China, where officials are trying to halt this increasing pace of inflation by imposing tightening policies and increasing interest rates 4 times since October, which will adversely affect the production and consumption level that create a negative impact on the GDP. 

There are signs indicating that the economy is cooling as the expansion in industrial production eased while the sales of vehicles retreated in April. The government is raising electricity prices for businesses and farmers in 15 provinces starting today, giving an incentive for generating.