China’s exports miss expectations, dimming growth hopes
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The news: China's export growth unexpectedly slowed in July, according to data from the General Administration of Customs reported by Bloomberg, rising 7% year-on-year in dollar terms and falling short of the 9.5%-to-9.7% forecast by economists.
The numbers: The growth in exports was also lower than the 8.6% rise in June. In contrast, imports increased by 7.2%, surpassing expectations and reflecting strong demand for high-tech imports, semiconductors and auto parts from the electric vehicle industry.
That narrowed the trade surplus to USD84.65 billion ($129 billion). Exports to major partners, including Japan, the UK, Russia and Australia, contracted in July, reversing from expansion in the previous month.
The context: A slowdown in exports reflects weakening global demand amid falling export prices, a cooling US economy, and the threat of US chip export restrictions, further threatening China's 5% growth target this year after an already soft April-June period.
What they said: “China’s unexpected export slowdown in July suggests foreign trade — the recovery’s key prop last quarter — may lend less support to 3Q GDP,” said Bloomberg economist David Qu. “The result is particularly concerning given the weakening outlook for the US economy, highlighted by the recent jump in American unemployment.”
The sources: Bloomberg , The Financial Times
