China’s Exports Show Positive Growth Due to Increase in Global Trade
In a recent survey, analysts have projected that China’s exports are poised to increase in July, largely due to a surge in global trade. The upswing in global merchandise trade has provided a boost for manufacturers, resulting in stronger orders, which is expected to sustain robust exports and alleviate tariff concerns.
Anticipated trade data set to be released on Wednesday is expected to reveal a 9.7 percent year-on-year growth in exports by value, surpassing the 8.6 percent increase witnessed in June. This growth is anticipated to represent the largest expansion since March of last year. This positive trend in exports is viewed as a bright spot amid the broader economic challenges confronting the world’s second-largest economy.
In addition to export growth, it is expected that imports also experienced an upturn, growing by 3.5 percent last month, rebounding from a 2.3 percent decline seen in June. This suggests that factory owners are procuring more parts and materials to be transformed into finished goods for export.
Furthermore, recent indicators from South Korea, a significant player in China’s tech imports, revealed a substantial increase in exports bound for China, reaching a 21-month high of $11.4 billion in the previous month.
While concerns have been raised about the economic deceleration in China, particularly attributed to the impact of the Covid-19 pandemic, analysts are optimistic about the country regaining momentum in the second half of the year. This optimism is supported by the hope that the support measures implemented by the government are beginning to stabilize the property sector.
Regarding trade restrictions, there have been looming concerns about tariffs and the possibility of additional duties. Nonetheless, China’s competitiveness across various sectors is expected to mitigate the impact of these restrictions. For example, the United States announced plans to increase tariffs on numerous Chinese products, but later opted to delay some of them. Similarly, the European Commission imposed provisional duties on Chinese electric vehicles, indicating a complex landscape of trade dynamics.
Despite these positive indications, China’s manufacturing activity experienced a slight decline in July, attributed to falling new orders and low prices. However, policy support is anticipated to bolster a recovery in activity in the coming months.
The projected trade surplus for July is approximately $99 billion, slightly lower than the surplus of $99.05 billion observed in June, indicating a relatively stable trend in China’s trade balance.
The overall outlook for China’s exports appears positive, supported by the anticipated growth in global trade and the measures taken by the government to stimulate economic recovery in the wake of the pandemic. These factors contribute to a sense of cautious optimism regarding China’s economic trajectory in the near term.
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