World Economy

China July Trade Weaker Than Expected

China July Trade Weaker Than ExpectedChina July Trade Weaker Than Expected

Chinese trade growth slowed significantly in July compared to the previous month, official data showed Tuesday, coming in well below expectations after months of steady momentum.

Analysts said that while exports and imports were still robust year-on-year, the latest data indicated a downward trend, AFP reported.

Exports rose 7.2% year-on-year to $193.65 billion, the customs administration said, undershooting a Bloomberg News forecast of 11%. Imports were up 11% year-on-year—compared with an expected increase of 18%—to $146.9 billion, lifting the trade surplus to $46.74 billion.

"Despite the uptick at the end of the second quarter, trade growth now appears to be on a downward trend," said Julian Evans-Pritchard, a China economist at Capital Economics. "In particular, the sharp decline in import growth since the start of the year suggests that domestic demand is softening."

The trade figures come despite other recent economic data that has been positive, including better-than-expected second-quarter GDP growth of 6.9%. The trade data follows the passing on Saturday of a UN Security Council Resolution that significantly strengthened sanctions on North Korea by banning its exports of coal, iron and other key hard-currency earners.

"Although China's monthly trade surplus increased, trade tensions between the US and China have eased following China's cooperation with the US for tougher economic sanctions on North Korea," said Rajiv Biswas, chief economist for IHS Markit.

"US-China bilateral trade relations are currently being driven by US-China cooperation on trying to bring North Korea back to the Six Party Talks."

Improving global demand, particularly for electronics, has boosted exports for China and other trade-reliant Asian economies in recent months after several lean years of declining shipments.

But investors have been more focused on its strong appetite for imports, particularly industrial commodities such as iron ore and coal, which have sparked a global price rally and fueled higher earnings and share prices for many resource-related companies.

China's iron ore imports in July fell from 2.4% from a year earlier as a recent buying spree eased, even though higher steel prices and a year-long construction boom have spurred mills in the world's biggest steel producer to ramp up output.

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