BEIJING—China's trade surplus widened sharply in May on stronger-than-expected exports growth from the previous month, indicating the troubles in Europe have yet to dent the appetite for Chinese goods.
China's rising trade surplus and strong growth in exports may lead to renewed pressure on Beijing from its trading partners to allow appreciation of China's currency, the yuan, which would reduce the competitiveness of its exports.
"Events in Europe might still have an impact on Chinese growth, but it hasn't happened yet. In the meantime, strong export growth and a sharp pick-up in China's trade surplus will not go unnoticed in Washington," Royal Bank of Canada economist Brian Jackson said in a note.
China's trade balance briefly dipped into deficit in March, before returning to a narrow surplus in April. In May, the surplus reached $19.53 billion, well above the median $8.8 billion forecast in a survey of 12 economists, and up sharply from April's $1.68 billion surplus.
At $131.76 billion, May exports were up 48.5% from a year earlier, data issued Thursday by the General Administration of Customs showed. That growth rate exceeded both April's 30.5% and the expected 30.2%. May was the sixth consecutive month of year-on-year growth.
Exports to the European Union rose to $25.9 billion in May from $22.3 billion in April. "The data shows that the European debt crisis has had no impact yet on China's exports," said UBS Securities economist Wang Tao.
But Barclay's Capital economist Wensheng Peng said there could be an impact ahead. "The recent weakening of the [euro] versus the [dollar] is likely to dampen Europe's demand for China's goods and services, clouding the outlook for exports, although this effect is likely to kick in gradually," he said in a note.
Exports to the U.S. rose to $24.1 billion from $20.5 billion in April.
UBS's Ms. Wang said the stronger-than-expected exports figure does not change her forecast for when China will allow its currency to appreciate. She has said she expects China to widen the yuan's daily trading band against the dollar and begin basing its value more on a basket of currencies later this month. She expects the yuan to rise 3% to 4% against the dollar this year.
Imports rose 48.3% to $112.23 billion, slowing slightly from April's 49.7% rise, but rising for the seventh straight month. Economists had expected imports to rise a slower 43.5%. The slight slowdown likely reflected moderating investment growth in China and destocking of raw materials, as well as recent declines in commodity prices.
May's iron-ore imports were down 6% from April to 51.9 million metric tons, in line with market expectations, as the steel industry began to hold down fresh imports.
Data issued separately showed urban property prices rising for the 12th consecutive month in May. Recent government measures aimed at reining in speculation in the property market and curbing runaway prices have yet to lower transaction prices nationwide.
Property prices in 70 of China's large and medium-size cities rose 12.4% in May from a year earlier, staying close to April's record 12.8% rise, the National Bureau of Statistics said Thursday. Prices in May rose 0.2% from April, slowing from the 1.4% rise in April from March, the bureau said.
However, the volume of home purchases fell in May, suggesting that buyers are waiting for sellers to lower prices. Measured by floor space, home sales last month fell 15.8% from April to 67.7 million square meters, the bureau said.
