Beijing. China’s exports grew at their slowest pace in three months in July, adding to concerns about the outlook for the country’s vast manufacturing sector, even as imports returned to solid growth.
Shipments abroad rose 7.0 percent in July from a year earlier, a slower pace of growth than June’s 8.6 percent and below expectations for a 9.7 percent increase.
“Due to the base effect, China’s exports may maintain single-digit growth in the near future, but considering the slowdown in external demand and tariffs, outbound shipments in the second half of 2024 will face further pressure,” said Lynn Song, chief economist for Greater China at ING.
Fears of US restrictions on chip sales to Chinese companies accelerate purchases
Imports rose at a strong 7.2 percent pace, reversing a 2.3 percent decline in June and marking the best performance in three months. They also exceeded analysts’ expectations for a 3.5 percent increase.
Xing Zhaopeng, chief China strategist at ANZ, said the strong import figures were supported by a rush by Chinese companies to buy chips amid expectations of further US restrictions on chip exports to the Asian giant.
“Looking ahead, the bullish business cycle may have come to an end. Both imports and exports are expected to slow in the third quarter.”
The world’s second-largest economy has struggled to gain momentum despite government efforts to boost domestic demand in the wake of the pandemic. A prolonged housing slump and fears of job insecurity have weighed on consumer confidence.
Trade surplus narrows
China’s trade surplus narrowed to $84.65 billion in July, down from $99 billion expected and $99.5 billion in June.
The United States has repeatedly highlighted the surplus as evidence of the trade advantages enjoyed by Chinese companies.
China’s economy grew 4.7 percent in the second quarter, below expectations, fuelling calls for policymakers to provide more support to meet the government’s full-year growth target of around 5 percent.
Chinese leaders last week pledged that stimulus measures would target consumers and that the country would engage in “countercyclical adjustments” for the rest of 2024.
Chinese exports face tariffs
Slowing export growth adds to concerns about the sector’s outlook, analysts say, at a time when many countries are growing increasingly uneasy about China’s trade dominance.
The United States, Europe and emerging economies from Turkey to Indonesia have raised tariffs and other barriers to Chinese goods. Washington announced plans in May to increase tariffs on a range of Chinese products starting August 1, but decided to delay some of them.
Chinese tech giants Huawei and Baidu, as well as startups, have stepped up purchases of high-bandwidth memory semiconductors to stock up in anticipation of U.S. cuts to chip exports to China, Reuters reported on Tuesday.
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– 2024-08-18 14:26:34
