BEIJING: China’s exports grew at their slowest pace in three months in July, missing expectations and adding to concerns about the outlook for the nation’s vast manufacturing sector even as imports swung back to resume solid growth.
Outbound shipments climbed 7.0% in July from the year earlier, a slower pace of growth than June’s 8.6% rise and missing forecasts of a 9.7% increase.
“Due to base effect, China’s exports may keep a single-digit growth in the near future, but considering the slowing external demand and tariffs, the outbound shipments in the second half of 2024 will face bigger pressure,” said Lynn Song, chief economist for Greater China at ING.
Imports rose at robust 7.2% rate, reversing a 2.3% decline in June and marking the strongest performance in three months. It also beat analysts’ expectations of a 3.5% rise.
The brighter imports figures were underpinned by Chinese firms’ rush to purchase chips ahead of expectations of further United States curbs on chips exports to the Asian giant, said Xing Zhaopeng, senior China strategist at ANZ.
“Looking ahead, the upward trade cycle may have ended. Both imports and exports are expected to slow down in the third quarter.” The world’s second-largest economy has struggled to gain momentum despite government efforts to stimulate domestic demand following the pandemic. A protracted property slump and fears about job security have dragged heavily on consumer confidence.
China’s trade surplus narrowed to $84.65 billion in July, compared with the $99 billion forecast and $99.05 billion recorded in June. The United States has repeatedly highlighted the surplus as evidence of trade advantages enjoyed by Chinese firms. China’s economy grew 4.7% in the second quarter, below expectations, keeping alive calls for policymakers to roll out more support to hit the government’s full-year growth target of around 5%.
Chinese leaders pledged last week that the stimulus measures will be directed at consumers and the country will make “countercyclical adjustments” during the rest of 2024.
The slowdown in export growth adds to concerns about the outlook for the sector, analysts say, with many countries growing increasingly uneasy about China’s trade dominance.
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