China: Merchandise exports grow at a slower rate in July
Merchandise exports climbed 7.0% year-on-year in July, following June’s 8.6% rise and somewhat undershooting market expectations. Automobiles, ships and electronics were key growth areas in July. Meanwhile, merchandise imports rose 7.2% in annual terms in July (June: -2.3% yoy). The increase was likely linked to a rise in processing trade and a surge in semiconductor imports ahead of potential higher U.S. tariffs under a Trump presidency.
As a result, the merchandise trade balance deteriorated from the previous month, recording a USD 84.6 billion surplus in July (June 2024: USD 99.0 billion surplus; July 2023: USD 79.4 billion surplus). Lastly, the trend improved, with the 12-month trailing merchandise trade balance recording a USD 861.6 billion surplus in July, compared to the USD 856.4 billion surplus in June.
Trade data later this year could be distorted by a front-loading of shipments ahead of a possible rise in tariffs under a Trump presidency. Over 2024 as a whole, China’s exports are seen higher than in 2023 due to a rebound in global electronics demand and increasing penetration of Chinese electric vehicles and batteries in global markets. However, export growth is likely to be below that seen in East Asia’s other key exporting economies, due to Western trade and tech restrictions on Chinese products and overcapacity weighing on export prices.