China’s export and import growth slows in July (Reuters poll)
BEIJING (Reuters) – Robust growth in China’s exports likely moderated in July amid accelerating COVID-19 cases around the world and continued pressures on global supply chains, revealed on Friday a Reuters poll.
While there are signs that China’s strong industrial recovery in the first half of the year may lose some momentum, foreign demand has remained strong in recent months even as factories in many countries return from closures.
The overall trade figures are also helped by the statistical base effects compared to the sharp declines of a year ago.
Exports are expected to have increased 20.8% in July from a year earlier, according to a median forecast from a Reuters poll of 21 economists, compared to a gain of 32.2% in June.
Imports likely rose 33.0% last month year-on-year, according to the poll, from a 36.7% growth in May. Despite China’s attempts to curb the surge in commodity prices, commodity prices remain high.
Exports grew much faster than expected in June, as strong global demand driven by easing closures and vaccination campaigns eclipsed new virus outbreaks and port delays.
But overall trade growth in the world’s second-largest economy could slow in the second half of 2021, a customs official warned last month.
“Export growth likely slowed further in July both year-over-year and month-to-month … Korea also reported weaker import growth from China. A typhoon around the Yangtze River Delta may also have reduced total trade growth during the month due to port disruptions, ”Goldman Sachs analysts said in a note.
Exporters struggle with higher transportation costs and persistent logistical bottlenecks.
Accelerating Delta-variant coronavirus outbreaks in several countries, coupled with natural disasters, have put enormous pressure on global supply chains and slowed turnaround times for global containers.
Container shipping rates from China to the United States have peaked at over $ 20,000 per 40-foot box amid increased orders from retailers ahead of peak U.S. shopping season to end. year.
China reported its highest daily number of new coronavirus cases in its current outbreak at 124 on Friday, fueled by an increase in locally transmitted infections in a growing number of cities.
“The next two weeks would be crucial to see if (China is) still effective in treating the Delta variant. Either way, consumption, especially summer tourism, is under great pressure, ”Macquarie Capital Limited’s Larry Hu said in a note.
Chinese factory activity increased in July at the slowest pace in 17 months as rising raw material costs, equipment maintenance and extreme weather conditions weighed on business activity, adding to concerns about a slowdown in the world’s second-largest economy.
The trade surplus is expected to be $ 51.54 billion in July, up from $ 51.53 billion in June, according to the poll. The data will be released on Saturday.
Reporting by Gabriel Crossley; Editing by Kim Coghill