Export growth plunges to 1pc as impact of crackdown on fraud has effect

Growth in Chinese exports fell sharply last month, but that's not all bad news, according to analysts.

They said the government's crackdown on fake invoices had helped produce a more accurate picture of the mainland's imports and exports as weak global demand continues to weigh on the world's second-largest economy.

Exports in May rose by 1 per cent to US$182.8 billion from the same month last year, according to customs data released yesterday. The growth was far below the 14.7 per cent increase in April and also well below the 7.4 per cent estimate of economists polled by Bloomberg.

Imports in May were down 0.3 per cent year on year. The trade surplus widened to US$20.4 billion from US$18.2 billion in April. Premier Li Keqiang said China had maintained relatively high but reasonable growth so far this year, meaning a package of economic stimulus measures was unlikely in the near future.

He told an economic conference in Hebei yesterday the government would support economic development through "activating" existing credit. Li reiterated the importance of encouraging private investment.

The strong export growth reported in the first four months of this year despite lingering weakness in the global economy was greeted with scepticism by economists. In particular, they said exports to Hong Kong were inflated.