Financial News: China Trade Surplus Hits Record High

China Trade Surplus Hits Record High

07/12/2024 - 05:38:00 (RTTNews)

(RTTNews) - China's faster-than-expected exports growth underpinned by strong global demand for auto and semiconductors and an unexpected fall in imports took the trade surplus to a record high, official data showed on Friday.

Exports posted an annual growth of 8.6 percent in June after rising 7.6 percent in May, the General Administration of Customs said. Shipments were forecast to climb 8.0 percent.

On the other hand, imports dropped 2.3 percent annually, in contrast to the 1.8 percent increase in May and confounding expectations for an expansion of 2.8 percent.

Higher exports and falling imports translated to a higher trade surplus. The trade surplus surged to a record $99 billion from $82.6 billion in the prior month. This was well above economists' forecast of $85.0 billion.

ING Economist Lynn Song expects a smaller boost to growth from net exports in the second half of the year, though if imports continue to disappoint this contribution to GDP growth may remain solid in the coming quarters.

Economists at Capital Economics said exports will stay strong in the near-term despite increased Western tariffs.

Imports are likely to rebound before long as the recent reacceleration in government bond issuance should translate into increased infrastructure spending, lifting demand for industrial commodities, they noted.

In the first half of the year, exports increased 3.6 percent and imports gained 2.0 percent, which resulted in the trade balance posting a surplus of $434.9 billion. During January to June, exports to the US grew 1.5 percent, while shipments to the European Union fell 2.6 percent. Meanwhile, exports to the Brazil surged 24.4 percent.

Today's trade data bodes well for the second quarter GDP. The National Bureau of Statistics is set to release GDP data on July 15.

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