June 10 (Bloomberg) -- China's exports probably rose faster than its imports for a seventh straight month in May, helping widen a trade surplus that's fueling tensions with the U.S. and the European Union. Growth in industrial production and retail sales was likely little changed from April, economists said.

Shipments from China, the world's third-largest trading nation, increased 30 percent from a year earlier and imports climbed 21 percent, according to the median forecasts of nine economists in a Bloomberg News survey. The customs bureau may report May trade figures by the end of next week in Beijing.

Central bank governor Zhou Xiaochuan said June 7 that China will introduce new policies to ``cut the trade surplus to zero if possible'' by increasing consumption. U.S. manufacturers and lawmakers say cheap imports from China are partly to blame for a record trade deficit and the loss of 1.1 million American jobs over the last three years.

``China is going to be a source of sustained pressure on global producers,'' said Tim Condon, head of Asia research at ING Bank in Singapore. ``Increased protectionist pressure building around the world goes hand in hand with rising trade.''

China's trade balance swung to a $21.2 billion surplus in the first four months of the year from a deficit of $11 billion a year earlier and Tao Dong, chief regional economist at Credit Suisse First Boston, predicts the gap may reach $95.8 billion this year.

``The increase in China's exports is largely due to globalization as production has moved to China. You probably cannot stop it,'' said Tao, who is based in Hong Kong. ``China needs to create jobs, so from the Chinese government's point of view, they don't want to stop'' exports, he said.

Low Wages

Global manufacturers are building factories in China to take advantage of wages that the Asian Development Bank estimates are less than a 20th those in the U.S.

DaimlerChrysler AG, the world's fifth-largest vehicle maker, said April 21 it is considering exporting Chrysler compact cars to the U.S. from China. General Motors Corp., which said June 7 it will cut at least 25,000 U.S. manufacturing jobs by the end of 2008, has announced plans to make Chevrolet Aero cars in Shanghai for overseas markets.

China's industrial production probably rose 15.8 percent in May after climbing 16 percent in April, a Bloomberg survey showed. By contrast, U.S. production increased 3.1 percent in April, Japan's grew 0.6 percent and Germany's climbed 1.9 percent. The U.S., Japan and Germany are the world's three largest economies.

Rising Consumption

It's not just cheap labor that's prompting global manufacturers to expand in China; rising consumption is also a factor. Retail sales in the world's most-populous nation rose 12.2 percent from a year earlier in April and, according to the Bloomberg survey, that pace of growth was maintained last month.

Hitachi Ltd., Japan's largest electronics maker, is increasing production of plasma televisions in China to 10,000 units a month from 1,000 units, the company said June 2. It predicts its sales of these products in China will reach 100,000 units next year, up from 10,000 in 2004.

Still, demand isn't growing as fast as production in many industries and that's preventing manufacturers passing raw- material cost increases on to consumers. China's inflation rate probably stayed at 1.8 percent in May, the lowest it's been since October 2003, the Bloomberg survey showed.

The National Bureau of Statistics is due to report May inflation on June 13, retail sales on June 14 and industrial production on June 15. All figures are expected to be released at about 10 a.m. in Beijing.

The following table shows economists' forecasts for the year- on-year percentage increases in exports and imports, consumer prices, retail sales and industrial production in April from a year earlier.

                        Exports            Imports
---------------------------------------------------
Median                    30.0               21.0
Average                   29.9               19.8
High                      32.0               25.0
Low                       26.4               14.5
Forecasts                   9                  9
---------------------------------------------------
Action Economics          31.5               21.5
Capital Economics         30.0               22.0
CFC Securities            31.0               19.0
Citigroup                 28.0               22.0
DBS Bank                  30.0               16.0
Lehman Brothers           32.0               21.0
ING                       32.0               25.0
JPMorgan                  26.4               16.8
UBS                       28.2               14.5
---------------------------------------------------

                                          Inflation
------------------------------------------------------
Median                                       1.8
Average                                      1.8
High                                         2.2
Low                                          1.3
Forecasts                                     8
------------------------------------------------------
Action Economics                             1.7
Capital Economics                            2.2
CFC Securities                               1.4
Citigroup                                    1.8
DBS Bank                                     2.0
JPMorgan Chase                               1.3
Standard Chartered                           2.0
UBS                                          1.7
------------------------------------------------------

                                        Retail Sales
------------------------------------------------------
Median                                       12.2
Average                                      11.9
High                                         13.5
Low                                          10.0
Forecasts                                      7
------------------------------------------------------
Action Economics                             13.5
Capital Economics                            12.2
CFC Securities                               10.0
Citigroup                                    13.0
DBS Bank                                     11.0
JPMorgan Chase                               11.5
UBS                                          12.2
------------------------------------------------------

                                      Industrial Output
------------------------------------------------------
Median                                       15.8
Average                                      16.0
High                                         17.5
Low                                          14.9
Forecasts                                      7
------------------------------------------------------
Action Economics                             17.5
Capital Economics                            14.9
CFC Securities                               16.5
Citigroup                                    15.5
DBS Bank                                     15.5
JPMorgan Chase                               16.3
UBS                                          15.8
------------------------------------------------------

To contact the reporter on this story: Nerys Avery at Navery1@bloomberg.net

Last Updated: June 9, 2005 12:01 EDT