Wed, Jul 14, 2021 page10

• China’s export growth unexpectedly accelerates

  BEATING FORECASTS: Commerzbank senior emerging markets economist Zhou Hao said the surprise surge in exports is likely in large part due to rising commodity prices

  • Bloomberg
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  China’s export growth unexpectedly picked up last month, shrugging off the effects of port disruptions in southern China and helping to underpin the economy amid signs that its recovery is starting to slow.

  Export growth accelerated to 32.2 percent in US dollar terms from a year earlier, the Chinese Customs Administration said yesterday, overturning economists’ expectations of a slowdown to 23 percent. Imports climbed 36.7 percent, also beating the median forecast of 29.5 percent. That left a trade surplus of US$51.5 billion for the month, the highest since January.

  A global appetite for Chinese goods, including medical goods and work-from-home equipment, has helped to spur exports this year and the data showed a broad-based expansion, with stronger shipments of goods such as cellphones, refined oil products and shoes.

  

  A cargo ship docks at the Yangshan container port in Shanghai on Saturday.

  Photo: AP

  The surge in trade last month came despite a resurgence in COVID-19 cases in southern China that had caused delays in shipments at some major ports for much of last month.

  “The surprise surge in exports is probably in large part due to rising commodity prices, as commodities like iron ore soared and price pressures passed on from imports to exports,” said Zhou Hao (周浩), senior emerging markets economist at Commerzbank AG.

  Export growth is likely to slow in the second half of the year because of a high base of comparison last year, he said.

  Chinese Customs Administration spokesman Li Kuiwen (李奎文), a spokesman for the customs administration, also said that slower growth in imports and exports is likely for the rest of the year, while full-year trade is still expected to register relatively fast expansion.

  “The development of foreign trade will still face quite a number of uncertain and unstable factors in the second half of the year,” Li said, as COVID-19 is still spreading in many countries and the pandemic situation remains complicated.

  Export growth to the US slowed to 17.8 percent last month, while picking up strongly to Hong Kong, Japan and South Korea.

  China’s trade surplus with the US continued to increase, reaching US$32.6 billion last month.

  However, the slowdown in import growth suggested that domestic demand recovery might be losing steam, although the headline reading remained relatively strong.

  “The strong external balance contrasts the weakness of domestic economy,” said Raymond Yeung (楊宇霆), chief economist for Greater China at Australia & New Zealand Banking Group Ltd. “However, it is the latter the leadership cares about under the flagship dual circulation strategy.”

  As export remains strong, the Chinese authorities are comfortable with the currency outlook, regardless of the changing interest rate cycle with the US Federal Reserve, he said.

  China’s central bank on Friday last week cut the lenders’ reserve required ratio, prompting some economists to speculate that policymakers were taking a pre-emptive approach by easing policy.

  Data due tomorrow on China’s GDP, retail sales, investment and industrial production are expected to shed more light on how the recovery is progressing.

  Earlier, the customs administration reported trade in yuan figures, showing that exports climbed 28.1 percent in the first half of the year from a year earlier, while imports rose 25.9 percent.
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