Exports measured in US dollars rose 18% year-on-year in July, the fastest growth of the year, according to Chinese customs data released on Sunday. did. Analysts polled by Reuters had forecast a 15% increase. Exports in June he increased by 17.9%.
Meanwhile, imports increased by 2.3% year-on-year, slightly below expectations, suggesting that domestic demand remains weak.
Strong export performance in July pushed China's trade surplus to her $101 billion, crossing her $100 billion threshold for the first time. By comparison, the trade surplus in July 2021 was just $56.6 billion.
David Chao, Global Market Strategist for Asia Pacific (excluding Japan), Invesco, said:
“Despite a softening global demand background, export growth has been greatly facilitated by the normalization of production activity in places such as the Yangtze River Delta [region]. he said. The Yangtze River Delta, which includes Shanghai and parts of Jiangsu and Zhejiang, is an important foreign trade center.
Strong demand from Southeast Asia, Europe and Russia underpinned his exports in July. Shipments to ASEAN countries, the European Union and Russia surged 34%, 23% and 22% respectively last month.
Larry Fu, chief China economist at Macquarie Capital, said a weaker Chinese currency and rising export prices boosted earnings. The
yuan has fallen 6% against the US dollar so far this year, he said. A weaker currency usually helps a country's exports because it makes goods cheaper compared to goods priced in a stronger currency.
Hu also pointed out that China's export price increase rate is roughly in line with his CPI increase rate for the United States.
"About half of July's major export growth is likely due to price effects," he said.
Much-needed help
A better-than-expected resilience in the export sector, a key driver of China's growth, is boosting the Chinese economy.
The country's leadership did not mention a growth target at a key Politburo meeting late last month, analysts said. Analysts said this is a sign that the government may not be able to meet its goals.
It will help offset any weaknesses.
Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said, "With domestic demand still weak, strong export growth will continue to support the Chinese economy in a difficult year. there is," he said.
However, weaker global demand and new coronavirus lockdowns in China are casting a shadow over the economic outlook.
Capital Economics senior China economist Julian Evans-Pritchard said in a note on Monday, “Retail sales in the developed world have returned to pre-pandemic trends after a very strong period. I'm back," he said.
High inflation and rising interest rates also mean that demand for consumer goods is likely to weaken further in many countries, he said.
"We believe that the cooling of global demand will soon dampen China's pandemic-driven export boom," he added.
Domestic weakness could persist if China does not change its zero-corona policy, analysts say.
Hainan, a tropical island in the South China Sea, has imposed a lockdown on several cities since late last week as the novel coronavirus spreads. That includes the beach resort city of Sanya, where snap lockdowns have left about 80,000 tourists stranded.
