China’s Export Engine Accelerates, Defying Expectations
China’s imports and exports posted stronger-than-expected growth in June as global demand for Chinese goods remained solid and sporadic Covid-19 outbreaks in the country’s biggest export hub didn’t hit outbound shipments as much as expected.
China’s exports increased 32.2% from a year earlier in dollar terms, accelerating from a 27.9% gain in May, data from the General Administration of Customs showed Tuesday. The reading was far stronger than the 23.2% growth forecast by economists polled by The Wall Street Journal, defying concerns that China’s post-Covid export boom was coming to an end.
China’s exports, a key engine of the country’s economic rebound after the coronavirus outbreak, had shown softness in recent months in the face of rising raw material costs, weakened overseas demand for Chinese-made goods and global shipping delays.
Lockdown measures introduced in late May to tame a flare-up in Covid-19 cases in the southern province of Guangdong, an economic and export stronghold, had economists worried about a prolonged impact on trade in Shenzhen’s Yantian port, one of the world’s busiest.
Tuesday’s data, however, have allayed some economists’ concerns. Louis Kuijs, head of Asia economics at Oxford Economics, said exporters appeared to be “shrugging off the impact of the temporary Shenzhen port closure and other supply-chain bottlenecks.”
Far from showing signs of slack, China’s combined imports and exports jumped to its highest-ever level for the first half of the year, customs spokesman Li Kuiwen said in a news briefing Tuesday. He added that monthly imports and exports had both racked up 13 straight months of year-over-year growth.
China’s imports, meanwhile, increased 36.7% in June from a year earlier—slower than May’s 51.1% year-over-year jump, but also far better than economists’ forecast of a 25.5% gain.
Taken together, the trade data expanded China’s trade surplus to $51.5 billion in June, from $45.5 billion in May, according to official data. Economists had expected China’s trade surplus to remain steady at $45.5 billion.
Even with the country’s exports sector still buoyant, Beijing has come to regard the global macroeconomic environment as increasingly uncertain, and warned that year-over-year trade growth will likely slow in the second half of the year.
Ren Hongbin, assistant minister at China’s Commerce Ministry, said in a briefing Monday the ministry would redouble its efforts to stabilize trade and foreign investment.
For some economists, the June data still wasn’t enough to dispel forecasts of a decline in exports in the coming months. “Easing supply shortages and still strong demand have helped to shore up trade volumes,” wrote Julian Evans-Pritchard, senior China economist at Capital Economics. But, he added, “we still think shipments will soften in the coming quarters.”