China Trade Rides a Wave in July After Coronavirus Restrictions Ease
By Erin Mendell
China's exports picked up momentum in July for the second
straight month, as global demand recovered with the easing of
Underpinned by strong shipments of protective gear for the
pandemic and electronic products to fulfill work-from-home demand,
July's 7.2% increase from a year earlier was the fastest so far in
2020, according to data released by the General Administration of
Customs on Friday. It beat June's 0.5% growth, in addition to a
0.1% increase expected by economists polled by The Wall Street
"After turning positive in June, July's export data showed an
overall improvement in global demand," said Iris Pang, an economist
with ING Bank in Hong Kong.
Exports to the Association of Southeast Asian Nations and the
U.S., China's No. 1 and No. 3 trading partners, jumped sharply to
post double-digit growth in July, while exports to the European
Union, China's second-largest trading partner, reported a smaller
"External demand has indeed passed the most difficult stage,"
said UBS economist Ning Zhang, who predicted a mild recovery in
China's exports in the second half of the year as Western economies
Meanwhile, China's imports dropped 1.4% from a year earlier in
July, reversing a 2.7 % increase in June. That came in lower than
economists' expectations for 1.0% growth. That meant its trade
surplus widened to $62.33 billion last month, much higher than the
$46.42 billion surplus in June and the $42.50 billion surplus that
economists had expected.
Imports fell mainly because of falling commodity prices in July,
as the volume of China's overseas purchases of crude oil, coal,
soybeans and other products rose sharply, officials and economists
"We think that goods imports will gain further traction in the
second half amid China's continued domestic recovery," said Louis
Kuijs, an economist with Oxford Economics.
Economic activity in China rebounded across the board in June,
helping its economy to post growth in the second quarter after a
sharp contraction in the first three months of the year. While
economists are optimistic about China's recovery for the remainder
of the year, the intensifying confrontations between Beijing and
Washington stoked concerns about its outlook.
Hours before China released trade data, the Trump administration
announced sweeping restrictions on two popular Chinese social-media
networks, TikTok and WeChat. The administration also recommended
Thursday that Chinese companies with shares traded on U.S. stock
exchanges be forced to give up their listings unless they comply
with American audit requirements.
The U.S. and China's top trade negotiators have agreed to talk
on Aug. 15 to assess Beijing's compliance with a bilateral trade
deal signed in January, The Wall Street Journal reported this
China has fallen well short of its trade-deal promises to buy
U.S. goods and services, according to the latest official data and
In the first seven months of the year, China's total goods
imports from the U.S. fell 3.5% from a year earlier to $67.71
billion, which is also well below the $87.46 billion for the same
period in 2017, official data released Friday showed.
In the trade deal signed in January, Beijing committed to
increasing its U.S. imports of goods and services by $200 billion
in 2020 and 2021, compared with the level recorded in 2017 before
the trade war began.
UBS's Mr. Zhang said that in the first half of the year, China
reached only about 23% of the total purchase target it promised in
the trade deal for the year. Though Beijing is committed to the
deal and has accelerated purchases in recent weeks, it is nearly
impossible for it to hit its target due in part to the coronavirus
pandemic, he added.
To hedge overseas risks, Chinese leaders have in recent weeks
pledged to strengthen the domestic market with more opening up to
foreign investors and have guided the country's exporters to sell
products at home.
Grace Zhu in Beijing contributed to this article.
Write to Erin Mendell at firstname.lastname@example.org
(END) Dow Jones Newswires
August 07, 2020 05:32 ET (09:32 GMT)
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