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China trade
EconomyEconomic Indicators

ExplainerChina’s trade ‘unevenness likely to continue’ as July data offers mixed bag

  • China’s exports in July grew by 7 per cent from a year earlier but fell short of an expected rise, while imports increased by 7.2 per cent

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China’s exports in July grew by 7 per cent from a year earlier. Photo: Xinhua
Andrew Mullen
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1. Exports fall short as demand fades

China’s exports, a major economic growth engine in the first half of the year, missed expectations and grew by only 7 per cent in July from a year earlier, to US$300.56 billion.
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Analysts pointed to the impact of lower prices and some fading of global discretionary demand as the reading fell short of the expected growth of 9.5 per cent surveyed by Chinese financial data provider Wind. The reading was also lower than the 8.6 per cent increase in June.

“Growth in export values slowed last month, but this was mainly due to lower export prices. Export volumes remained near record highs,” said Zichun Huang, a China economist at Capital Economics.

“After accounting for changes in export prices, and for seasonality, we estimate that export volumes softened a touch but remained close to record highs.”

More discretionary items, though, showed weakness last month with contractions in exports of furniture, handbags and suitcases, clothing and toys, said analysts at HSBC. However, electronics exports outperformed as laptops, LCD displays and mobile phones recorded pickups in year-on-year terms.

“With leading indicators like the new export orders purchasing managers’ index pointing to further weakness in global demand, combined with [Wednesday’s] miss in exports growth, we remain cautious on the global demand revival outlook,” said the analysts at HSBC.
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“Some of the softer momentum in exports is not entirely unexpected, given increased trade tensions and a relative preference for services over goods for global demand.”

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