Last month's export data, which showed a significant increase, seemed to have reversed by May.

The trade surplus decreased by 16.1% compared to May of last year, with exports also showing a decline.

If trade is not ideal, it is also difficult for us to rely on domestic demand, because although the latest CPI has not been released, the one for April is already close to the freezing point, fully indicating that consumption is not very ideal.

Interest rate cuts are getting closer, but many people worry that even interest rate cuts may not be able to save the economy.

01, the surplus decreased by 16%.

The General Administration of Customs announced the latest trade data. If we look at the cumulative value for the first five months, the performance is not too bad, with exports increasing by 8.1% and the total value of imports and exports also increasing by 4.7%.

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Moreover, the trade surplus for the first five months is close to 360 billion US dollars, which is an increase of 27.8% compared to the same period last year.

However, we are tracking this data every month. Last month's cumulative trade surplus growth reached 56%. This month's growth has decreased to less than 28%.

Setting aside the cumulative data, if we look at the monthly data, it may be more worrying.

In May of this year, China's exports decreased by 0.8% in RMB terms and by 7.5% in US dollar terms.The trade surplus, when calculated in US dollars, not only failed to grow but actually decreased by 16.1% compared to May of last year. Even when calculated in RMB, it was down by 9.7% compared to the same period last year.

02, Slow Import Growth

Starting from the fourth quarter of last year, we experienced a period where exports were quite challenging.

During March, there was an improvement in our country's export situation, with an approximate 15% increase in US dollar terms. In RMB terms, the increase was about 25%.

This was a month that began to reverse the trend, and many people also hoped that our trade would从此 take the fast track.

The data from last month was also encouraging, with export figures still on the rise.

However, the contradiction lies in the unsatisfactory import data. The situation in May was no different, with import values decreasing by 4.5% in US dollar terms. The import value for the first five months of the year, calculated in US dollars, fell by 6.7%.

Do not assume that an increase in exports and a decrease in imports are beneficial for expanding the trade surplus; one cannot look at things from only one perspective.

The reduction in imports indicates that domestic consumer power is still lacking.

03, Is Lowering Interest Rates Effective?In fact, we can observe the current consumption situation indirectly from CPI data.

It is common sense that if more people buy, prices naturally rise, and if everyone refrains from buying, prices are bound to fall. The monthly CPI has been continuously declining in the first four months of this year, and it has now dropped to a freezing point.

With only a 0.1% increase, it is very likely to turn negative soon.

Of course, the low CPI in April is closely related to the epidemic factors of the same period last year, when prices remained high. However, it is believed that the CPI for May is also not very optimistic.

Precisely because the current inflation pressure is very small, and the recovery of consumption is insufficient, more and more analysts point out that it is necessary for us to lower interest rates again.

In traditional economics, lowering interest rates can reduce borrowing costs, stimulate consumption and investment, and thus promote economic growth.

However, reality shows that the interest rate cuts in the past two years seem to have little effect.

Firstly, although lowering interest rates can lead to an increase in the money supply, our money supply has not been small over the past year. Compared with a year ago, the broad money balance has increased by 32 trillion.

But the money has not entered the real economy.

04, waiting for more dataAt the beginning of the month, many small and medium-sized banks announced a reduction in deposit interest rates, and soon after, news of large banks lowering their rates also emerged.

It is expected that the MFL rate for this month will decrease, which implies a corresponding decline in the LPR.

However, the effectiveness of this move still needs to be observed.

Currently, we need to continue monitoring economic data, including the latest consumer retail data and the CPI for May.