China's May trade plunges but investment up

If you STILL think stimulus doesn't work!

China's investment surged in May as the government poured money into its economic stimulus, helping to offset an unexpectedly sharp drop in trade, and economists said the world's third-largest economy was improving.

Spending on factories and other fixed assets soared 32.9 percent in the first five months of the year, the National Bureau of Statistics said. Merrill Lynch said that translated into growth in May of up to 38 percent.

"Domestic activity has picked up, thanks to the government stimulus spending," said economist David Cohen of Action Economics in Singapore.