China, export rush slows. Slump towards the US

From our correspondent

NEW DELHI - Confirming the impact on global trade of the tariffs war unleashed by the United States, China's overall exports grew at their slowest pace in three months in May, largely due to a slump in exports to the US. At the same time, deflationary pressures increased, with producer prices registering their sharpest contraction in almost two years.

China's exports to the rest of the world grew 4.8% year-on-year last month, down from 8.1% in April and below the 5% average forecast by a group of economists polled by Reuters news agency. Imports fell 3.4 percent year-on-year, a sharp deterioration from April's 0.2 percent drop. Expectations were for a much more modest contraction of less than 1 per cent.

Much of the decline in Chinese exports is attributable to tensions with the US: customs data show that exports from Beijing to the US fell 34.5% year-on-year, extending April's 21% drop. Flows from the US to China also fell further, down 18.1 percent from April's -13.8 percent.

'Export growth has probably been held back by customs controls, linked to export restrictions,' says Xu Tianchen, senior economist at the Economist Intelligence Unit, noting that exports of rare earths (which have become a negotiating weapon against the US) nearly halved last month, while exports of electrical machinery slowed significantly.