Chinese exports rise 8.6% in June, beating forecasts despite trade tensions

HONG KONG (AP) — China’s exports beat forecasts in June, customs data showed Friday, while imports rose less than expected.

Exports rose 8.6 percent from the same period last year to $307.8 billion, according to data released by Chinese customs, beating estimates of around 7.4 percent to 8 percent growth. Imports, however, fell 2.3 percent from a year earlier to $208.8 billion.

Strong Chinese exports in June led to a widening of its trade surplus to $99 billion from $82.6 billion in May.

The export growth comes as China faces escalating trade tensions with the United States and Europe. WE And Europe have increased tariffs on electric cars made in China.

“The tariffs imposed by the US and EU will not have a significant impact on overall exports in the short term. They only target a small portion of China’s exports,” Zichun Huang of Capital Economics wrote in a note, adding that the effects of the tariffs can be mitigated by “trade diversion and exchange rate adjustments.”

“Overall, we expect exports to remain a supportive factor for economic growth in the near term,” she said.

Import volumes are expected to rebound soon as the recent surge in government bond issuance is expected to drive higher infrastructure spending, thereby increasing demand for industrial raw materials, Huang wrote.

The 10-nation Association of Southeast Asian Nations (ASEAN) remains the top destination for Chinese products, with exports to ASEAN up 10.7 percent year-on-year in the January-June period. In June, China exported $49.8 billion to ASEAN countries.

Exports to the United States increased by only 1.5% in the January-June period compared to the same period last year, while shipments to the European Union decreased by 2.6%.

Steel, automobiles, household appliances and ships are the fastest growing Chinese export sectors this year. China exported 2.93 million automobiles in the first six months of the year, along with 29.8 million ships.

China has been accused by the United States and the European Union of overproducing and flooding foreign markets with cheap electric vehicles. Both countries have tried to impose tariffs on the vehicles. Meanwhile, China also fears that tariffs on its electric vehicles will reduce exports amid falling domestic demand.

Industrial activity in China remained stable in June, according to an official survey released last week.

The China Federation of Logistics and Purchasing’s manufacturing purchasing managers’ index was unchanged at 49.5 in June from the previous month. In April, the PMI came in at 50.4, on a scale that goes to 100, where 50 marks the break between expansion and contraction.

The story continues

China is struggling to rebound from the COVID-19 pandemic as it grapples with weaker global demand after the U.S. Federal Reserve and other central banks raised interest rates to combat inflation. A slowdown in China’s real estate sector is also weighing on growth.

China has targeted about 5% economic growth this yearan ambition that will require more political support, according to economists.