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Chinese export growth unexpectedly accelerated in June, ignoring the impact of port disruptions in southern China and helping to support the economy as the recovery begins to slow.
Export growth accelerated to 32.2% in dollars in June from the previous year, the customs administration said on Tuesday, reversing economists’ expectations of a slowdown to 23%. Imports climbed 36.7%, also beating the median forecast of 29.5%. That left a trade surplus of $ 51.5 billion for the month, the highest since January.
The global appetite for Chinese products, including medical products and work-from-home equipment, helped boost exports this year and data showed widespread expansion, with larger shipments of products such as cellphones, refined petroleum products and footwear. The increase in trade last month came despite a resurgence of coronavirus cases in southern China that had caused delays in shipments to some major ports for much of June.
“The surprise surge in exports is probably due in large part to rising commodity prices, as commodities like iron ore soared and price pressures trickled down from imports to exports. “said Zhou Hao, senior emerging markets economist at Commerzbank AG. Export growth is likely to slow in the second half of the year due to a high base last year, he said.
Commodity inflation
Values soared even as volumes remained stable
Source: General Administration of Customs of China, Bloomberg calculations
Li Kuiwen, spokesperson for the customs administration, also pointed to a slowdown in import and export growth for the remainder of the year, while noting that full-year trade is still expected to expand relatively rapidly. .
“The development of foreign trade will still face a number of uncertain and unstable factors in the second half of the year,” Li said, as the coronavirus is still spreading to several places around the world and the pandemic situation remains complex.
Export growth to the United States slowed to 17.8% in June, while picking up strongly towards Hong Kong, Japan and South Korea. from China the trade surplus with the United States continued to grow, reaching $ 32.6 billion last month.
Slowing import growth, however, suggested that the rebound in domestic demand may falter, although headlines reading remained relatively strong.
“The strong external balance contrasts with the weakness of the domestic economy,” said Raymond Yeung, chief economist for Greater China at Australia & New Zealand Banking Group Ltd. “However, it is the latter that the leaders are concerned with as part of the flagship dual circulation strategy.” While exports remain strong, authorities are comfortable with the foreign exchange outlook regardless of the shifting interest rate cycle with the US Fed, he said.
The Central Bank of China reduced the reserve requirement ratio of lenders last Friday, prompting some economists to speculate that policy makers took a preventative approach by relaxing the policy. Data expected Thursday on China’s gross domestic growth, retail sales, investment and industrial production will help better understand the progress of the recovery.
Previously, the customs administration had reported yuan trade, showing that exports grew 28.1% in the first half of the year over the previous year, while imports increased 25.9%.
– With the help of James Mayger, Lin Zhu, Yujing Liu, Yinan Zhao and Bihan Chen
(Updates with comments and additional details about Economists)
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