China’s politically sensitive trade surplus expanded to $US31.48 billion ($A30.36 billion) in July as exports rose by a fifth to hit a new record high.
Exports were up 20.40 per cent year on year to $US175.13 billion – a fresh monthly record – while imports rose by 22.90 per cent, the customs agency said on its website on Wednesday.
The trade surplus – a major point of tension for China’s key trade partners, the United States and Europe – outstripped June’s figure of $US22.27 billion.
It also exceeded a Dow Jones forecast of $US26 billion, based on a poll of economists.
The surge in exports came despite manufacturing activity in China contracting for the first time in a year in July due to Beijing’s efforts to slow the economy and weakening overseas demand, according to HSBC data.
However, some experts said consumer confidence in the United States and Europe were likely to hit China’s exports in the coming months.
“The data is slightly above expectations with the wider trade surplus,” said Tang Yunfei, Beijing-based economist with Founder Securities.
“But given the situation in the US and euro zone, consumer confidence there is likely to slide in coming months and negatively impact the exports.
“However, if China takes effective countermeasures such as more pro-growth policies, maybe it will drive the recovery of confidence globally.”
Alistair Thornton, a Beijing-based China analyst at IHS Global Insight, said July’s export rebound was partly due to seasonal factors.
“Exports of many labour-intensive products, such as garments, normally pick up in the third quarter, reflecting demand for Christmas-season orders overseas,” he said. “Given that most orders for the next few months have already been placed, it is unlikely that the drastic downward shift in global sentiment will have too big an impact on exports through the short run.
“Nonetheless … the recent market turmoil will certainly feed into the data towards the end of the year.”
The expansion of the trade surplus is expected to add further pressure for the Chinese currency to appreciate.
China’s major trading partners have long complained that the yuan is deliberately undervalued to give Chinese exporters an unfair advantage.
AFP
