China exports growth slows slightly while imports boom
Strong trade figures for July continue to boost world’s second-largest economy
China’s export growth missed expectations last month but imports rose, reversing previous falls as trade remained the strongest driver in the world’s second-largest economy despite increasing accusations of oversupply from the US and EU.
Exports rose 7 per cent year on year in dollar terms in July, according to official data released by China’s customs authorities on Wednesday, lower than an 8.6 per cent rise in June. A Reuters poll of analysts had forecast growth of 9.7 per cent.
Imports rose 7.2 per cent, reversing a decline of 2.3 per cent year on year in June and far outpacing the 3.5 per cent growth predicted by the Reuters poll.
The figures put China’s trade surplus at $84.7bn, compared with forecasts for $99bn and June’s figure of $99.05bn.
China’s economy has depended on trade and industrial output to offset slowing growth from a prolonged real estate downturn and sour local government finances, which have knocked consumer confidence and household spending.
Investor confidence has also been hit by government crackdowns and Beijing’s insistence on providing only incremental stimulus to ensure the economy hits its official growth target of 5 per cent, which is low by the standard of previous decades.
President Xi Jinping is pushing a vision of lifting China’s productivity through investment in advanced technology, manufacturing and innovation, with state banks pumping lending into industry rather than stimulating domestic demand.
This has led to disinflationary pressures in the economy, with the lower prices supercharging the competitiveness of China’s exports at a time when developed markets are wrestling with higher inflation.