China’s surprisingly robust export growth in July boosted its trade surplus to another record. This upturn provided much-needed support to the country as it struggles to recover from a COVID-induced slump.
The state’s trade balance posted at $101.26 billion last month, surpassing the market consensus of $90.00 billion. At the same time, the indicator significantly increased from the previous $97.94 billion.
Subsequently, exports accelerated by 18.00% in July from a year earlier, beating analysts’ expectations for a 15.00% gain. The latest result came in higher than the 17.90% increase in June, marking the fastest pace this year.
The outbound shipments were one of the few bright spots for China’s economy in 2022. The nation currently grappled with widespread lockdowns that hit businesses and consumers hard. In addition, the once strong property market of the world’s second-largest economy lurches from crisis to crisis.
Analysts cited that Beijing’s export growth continues to help the country in a difficult year as domestic demand remains sluggish. Nevertheless, several experts have anticipated the outbound shipments to fade amid the prospects of a global slowdown.
Locally, China’s official manufacturing survey signaled a contraction last month. This reading raised fears that the recovery from lockdowns in spring will be slower than forecast.
On the upside, there are signs of recovery in transport and supply chain disruptions caused by COVID restrictions. This rebound is just in time for shippers preparing for peak year-end shopping demand.
China’s imports remain lukewarm
Meanwhile, China’s imports were at 2.30% for the month of July, missing the expected 3.70% rise. Regardless, the data inched up from the precursory reading of 1.00%.
This softer growth came in despite ramped-up infrastructure spending by the local government. Most analysts had projected inbound shipments to pick up modestly in the latter half of the year.
Specifically, crude oil imports skidded 9.50% from a year earlier. Then, the annual volume of imported integrated circuits, a significant Chinese import, fell by 19.60% last month.
In late July, the International Monetary Fund slashed its 2022 growth forecast for China to 3.30% from 4.40%.