China’s export growth unexpectedly accelerated last month in the fastest gain since April.
Total exports rose 7.2% in July from a year earlier, according to data released Thursday by the customs authorities. That’s more than economists’ forecast for a 5.6% increase.
Imports climbed 4.1%, leaving a surplus of US$98.2 billion (RM415.34 billion).
The resilience in overseas shipments comes despite the high tariffs imposed by the US, suggesting that global demand remains a significant driver for China’s economy.
Shipments to the US fell 22% from a year earlier after slumping just over 16% in June.
Chinese firms were able to increase their sales in other markets to compensate for the drop to the US, with exports to the European Union rising 9.3% and growing almost 17% to the 10 Southeast Asian nations in the Asean group.
In the first half of the year, exports hit a record as companies tried to ship goods as quickly as possible to avoid the risk of tariffs. The question now is whether that strength continues for the rest of the year with front-loading expected to fade.
High frequency data indicates that trade activity is slowing, with Chinese ports processing fewer containers in the seven days through Aug 3 than the previous period, the second straight week of declines.
China has also increasingly relied on third countries for the manufacturing of final products or components, a trend that accelerated following Donald Trump’s first trade war and his imposition of higher restrictions on the world’s second-largest economy.
China’s share of total value-added manufacturing of goods destined for the US through countries including Vietnam and Mexico surged to 22% in 2023 from 14% in 2017, according to Bloomberg Economics.
Source: theedgemalaysia