Link Securities | Dollar-denominated exports rose 7.2% year-on-year in China in July, beating the Reuters consensus of 5.4% and following 5.8% growth in June. Bloomberg highlighted that the resilience of Chinese exports came despite US tariffs, indicating strong global demand and exports remaining a key factor in the economy. Imports rose 4.1% year-on-year in July, contrasting with the expected 1.0% decline and accelerating growth from 1.1% in June. Imports, growing for the second consecutive month, recorded their biggest rebound in a year.
However, the trade deficit narrowed in July to $98.2 billion, compared to the expected $105 billion and also lower than the $114 billion in the previous month, driven by the increase in imports. Customs data showed that shipments to the US plummeted by 21.7% in July, following a 16% drop in June, accounting for only 12.4% of total Chinese exports for the year. It should also be noted that, according to US government data, its trade deficit with China fell to its lowest level in 21 years. Meanwhile, shipments to the Association of Southeast Asian Nations (ASEAN) rebounded by 16.6% year-on-year in July, increasing the year-to-date total to 13.5% of China’s total exports. Exports to the European Union increased by 9.3% year-on-year in July, with a 7% increase in the year to date, despite tensions between the Chinese government and the European Commission (EC). However, high-frequency data suggests that activity is slowing, with Chinese ports processing fewer containers in the week of 3 August than in the previous week, marking their second consecutive weekly decline.
