China trade showed unexpected strength in August

A vendor loads goods from a pick-up station near a clothing wholesale market in Beijing

Imports rose by a better-than-forecast 1.5 percent over a year earlier, up from July’s 12.5 percent plunge and the first monthly gain since 2014, customs data showed yesterday. Exports fell 2.8 percent but that was better than expected and an improvement over the previous month’s 4.4 percent contraction.
The improvement in exports was a boost for Chinese leaders who are trying to protect millions of trade-supported jobs. Import growth suggested lackluster Chinese domestic demand might be recovering.
“A gradual recovery in global demand probably means some further upside to export growth in the coming quarters,” Julian Evans-Pritchard of Capital Economics said in a report. “Import growth should also pick up further on the back of stronger domestic demand and a further recovery in global commodity prices.”
Chinese economic growth held steady at 6.7 percent in the quarter ending in June but that was the lowest quarterly level since the aftermath of the 2008 global crisis.
The communist leadership has warned China’s economic outlook will be “L-shaped,” meaning a five-year-long decline is expected to level off but there is no sharp rebound in sight.
An unexpectedly sharp decline in global demand for Chinese goods over the past two years threatened to disrupt Beijing’s marathon effort to reduce reliance on trade and investment. Those plans call for nurturing domestic consumer demand but are based on holding exports steady to avoid politically dangerous job losses.
China’s trade figures have been depressed over the past year by a decline in global commodity prices but trade volumes also weakened.
Exports totaled USD190.6 billion in August while imports were $138.5 billion. The global trade surplus was $52 billion.
The trade surplus with the 28-nation European Union, China’s biggest trading partner, was $13.6 billion. The gap with the United States was $25.2 billion. AP