China’s Exports Are Gaining Traction
China’s export growth surprisingly accelerated in July. It caused an uplift in the economy as it fights to rebound from a recession caused by COVID. Still, falling global demand may begin to weigh on shipments in the next coming months.
Exports increased 18.0% in July, the quickest rate this year, according to official customs statistics released on Sunday, compared to a 17.9% growth in June and beyond analysts’ forecasts for a 15.0% increase.
Extensive lockdowns have taken a heavy toll on firms and consumers. Hence, the once the biggest property market took a significant hit. However, outbound shipments have remained a highlight in the Chinese economy in 2022.
However, many economists predicted that exports would decline as the global economy, burdened by skyrocketing prices and rising interest rates, entered a significant recession.
Demand deteriorated in July. Orders and output indexes fell to their lowest levels since the COVID-19 epidemic began in early 2020.
China’s official manufacturing survey showed activity dropped last month, prompting concerns that the economy’s recovery from spring lockdowns will be slower and more difficult than predicted.
Foreign trade container throughput at eight main Chinese ports increased 14.5% in July, up from 8.4% in June. As supply snarls eased and firms there cranked up production, Pent-up demand from Southeast Asia may have helped boost July shipments. Following a rocky second quarter, most experts expected China’s import pace to moderate in the year’s second half, fueled by construction-related equipment and commodities as the government steps up infrastructure investment.
Imports increased 2.3% yearly, compared to a 1% increase in June and falling short of the 3.7% increase predicted.
Crude oil imports declined 9.5% in July, as fuel demand recovered more slowly than projected owing to new virus outbreaks.
The volume of imported integrated circuits – a significant Chinese import – fell 19.6% in July compared to the previous year.