Economist: Chinese exports to remain solid this year
10 Aug 2020


China's July trade outperformed in yuan-denominated terms. Exports jumped 10.4 percent from a year earlier, while imports rose 1.6 percent in yuan terms, both beating expectations.


In dollar terms, the trade balance grew by 62 billion dollars, higher than the 42 billion expected. Exports increased 7.2 percent on year, beating a forecast of a 0.2 percent decline.


Imports however, dropped 1.4 percent from a year ago, versus the one percent rise predicted by a Reuters poll.


That compared to a 0.5 percent rise in exports and 2.7 percent growth in imports in the month of June. Customs officials credit the strong numbers to the overall control of the pandemic in the country.


"The trade numbers benefited from the control of the pandemic domestically and shows the resilience of the Chinese economy. There are more positive factors supporting export growth as well. That's why we are seeing a strong rebound in export growth," said Liu Kuiwen, director of statistical analysis department at China General Administration of Customs.


Exports of medical related goods continued to support overall outbound shipments from China. Increase in demand for electronics, furniture and other household products as people are still stuck at home in many parts of the world also helped China's export growth.


Economist Jeremy Stevens with Standard Advisory in China said that Chinese exports are expected to stay in the positive in the coming months. That's as the country's manufacturing sector shows robust growth and is producing for external demand.


"There's been a spike in demand for example from the United States for orders from China in recent weeks, that's been reflected in elevated shipping rates which we track quite closely. The critical part going forward is that unlike elsewhere, China's economy is back online, its manufacturing sector is back and taking orders. So all things considered, the data certainly reinforces the notion that the Chinese economy is recovering and showing certain degree of flexibility and strength and we will probably continue to outperform most other economies this year and probably next year. And I believe in the coming months China's trade data is likely to continue to be relatively solid," said Stevens.


Stevens said that the path for imports was less obvious as they are largely dependent on China's investment in infrastructure and real estate construction later this year.


"The path ahead for infrastructure construction and real estate construction isn't that clear, at least for the fourth quarter of this year. A lot of the government supports have been front loaded, the central bank started to turn more neutral. What's going to happen to infrastructure and real estate investment which are critical components for raw material demand from the rest of the world? So the path from there is a little bit less clear," he said.


For the first seven months of the year as a whole, Yuan denominated exports declined 0.9 percent, while imports dropped 2.6 percent.


Source: CGTN