Beijing: Customs data on Saturday showed that despite losing some momentum, China’s exports remained strong in July. Analysts pointed to a rebound in port activity, but warned that the recent spread of delta variables may drag growth.
Driven by demand for commodities such as medical equipment and electronic products needed for home work, the world’s second-largest economy’s outbound freight volume has remained resilient this year. Coronavirus cases in other places have returned, increasing reliance on Chinese products.
With the strict lockdown and large-scale testing, commercial activities in China have basically returned to normal, although the country is now stepping up measures to contain the spread of the Delta variant, and local epidemics have been detected in more than a dozen provinces.
However, the General Administration of Customs stated that trade remained strong in July, with exports increasing by 19.3% year-on-year, slightly lower than expected.
A Bloomberg survey of analysts predicts a year-on-year increase of 19.9% after an unexpected surge of 32.2% in June.
At the same time, official data showed that imports increased by 28.1% year-on-year.
According to the latest data, China’s overall trade surplus in July was US$56.6 billion, higher than the US$51.5 billion in June.
Official data show that despite the slowdown in export demand for masks compared with last year, electronic products continued to support export growth in the first seven months of this year.
Irene Cheung, senior strategist at ANZ Research Asia, pointed out this week that after the previous outage, “port activity has rebounded”.
“On the other hand, imports could have received a boost from the increase in commodity prices,” she added.
China has been working to temper rising costs of bulk commodities, which have piled pressure on smaller enterprises.
But ING economists added in a note that stricter social distancing measures with China’s Covid-19 resurgence in recent weeks is likely to cause some damage, even if the impact may be somewhat offset by exports of electronic parts and products.
“In addition to the Delta variant, China is dealing with other negative shocks to its near-term growth,” Nomura economists said this week.
In addition to natural disasters such as heavy rains and floods in Henan Province that have restricted economic activity, Beijing has also adopted austerity measures for the real estate industry and high-polluting industries.