Exports Sustain China’s Economic Recovery

CHINA’S EXTERNAL TRADE account continues to thrive even as there are signs of authorities’ concerns that the domestic recovery is losing steam.

Exports rose by 32.2% year-on-year in June, the ninth successive month of double-digit growth and the sixth month of growth of more than 25%, the General Administration of Customs announced today. 

That reflects in part a rise in producer prices, working through to the value of exports, but also the continuing demand in importing economies as they, too, start to recover.

Loosening of supply chain bottlenecks, particularly for semiconductors, is working through to sales of semi-manufactures and finished goods. Goods imports rose by 36.8% year-on-year, the fourth month in which that sort of pace has been sustained.

The imports number was bolstered by a 37.6% increase in imports from the United States as China continues to chase down its obligations under the Phase One US-China Trade Agreement, now entering its final six months. The Petersen Institute for International Economics tracker shows imports from the United States as of the end of May running at 69% of where they should be to be on track with the two-year target.

However, China’s trade surplus with the United States has risen during the pandemic to $361 billion in the year to end-June, from $296 billion in the twelve months to end-2019.

China’s trade will likely slow but remain robust in the second half of the year as global recovery gains pace, assuming no disruptive resurgence of the pandemic. However, it is still running ahead of the recovery of the economy as a whole. The People’s Bank of China’s recent tempering of its easy monetary stance, via 50 basis points cuts in the requirements for reserve capital to be held by banks, reflects rising concerns about slowing domestic activity.

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Filed under Economy, Trade

2 responses to “Exports Sustain China’s Economic Recovery

  1. Pingback: China’s GDP Growth Laboured In The Second Quarter | China Bystander

  2. Pingback: IMF Trims China Growth Forecast | China Bystander

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