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China surprises with best export growth since March

PortandTerminal.com, August 8, 2019

Chinese exports rose unexpectedly in July, beating expectations for a fall, as trade tensions with the US continued to fester

BEIJING, CHINA – An increase in shipments to Europe and Southeast Asia helped fuel a rebound in China’s exports in July. Economists expect the trend to be short-lived though as Washington prepares to slap even more tariffs on Chinese goods.

Export growth vs an expected decline

July exports rose 3.3 percent from a year earlier, the fastest since March and more than the most optimistic had estimated in a poll by Reuters news agency, customs data showed on Thursday. Analysts had expected a 2 percent drop after a 1.3 percent fall in June.

“It could suggest that some (Chinese) exporters are trying to diversify their export regions”

Betty Wang, Senior China Economist at ANZ

Imports, however, remained weak, declining 5.6 percent and highlighting sluggish domestic demand as China’s economy struggles to get back on firmer footing. Still, the drop was less than an expected 8.3 percent and June’s 7.3 percent.

While China’s exports to the US continued to shrink in July in the face of stiffer tariffs, shipments picked up to Europe, South Korea, Taiwan and – most noticeably – Southeast Asia.

Washington watching

Photo of President Donald Trump

Tensions between the world’s two largest economies intensified this week after the US officially named China a “currency manipulator” following a sharp drop in the value of the yuan against the US dollar.

The US has vowed to impose duties on $300bn worth of Chinese products on September 1, after long-running trade negotiations between the two countries broke down.

Based upon today’s numbers from China though, it would appear that the US is feeling the pinch of the ongoing trade war more sharply than China.

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