China’s exports and imports rebounded by more than estimated last month, adding to signs that the economy is stabilizing following a two-quarter slowdown.
Shipments abroad rose 5.1 percent from a year earlier, the General Administration of Customs said in Beijing Sunday. The median estimate was for a 2 percent increase in a Bloomberg News survey, after June’s 3.1 percent drop. Imports gained 10.9 percent, leaving a trade surplus of $17.8 billion.
Exports to the U.S. and European Union, China’s biggest markets, increased for the first time in five months. Improved trade may bolster Premier Li Keqiang’s chances of achieving the year’s 7.5 percent target for expansion in the world’s second-largest economy, after official manufacturing and service-industry indexes rose in July.
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A Chinese flag flies on a vessel moving past shipping containers being unloaded at a Tianjin Port Group Co. dock in Tianjin on Thursday. (Bloomberg) |
“Many people were worried that China’s economy would drop very fast in a short period of time,” said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong. “But now it seems that the real economy hasn’t been seriously impacted. The risk that the real economy will decline rapidly is lower.”
The benchmark Shanghai Composite Index of stocks fell 0.1 percent at the close after rising as much as 0.6 percent following the report. The Australian dollar rose, with data showing China’s imports from the country up 24.6 percent, the most since May 2012.
The yuan Sunday strengthened to a 19-year high and was up less than 0.1 percent to 6.1175 per dollar at 3:50 p.m. in Shanghai, according to the China Foreign Exchange Trade System.
The volume of crude imports rose in July to a record high as Sinopec, the country’s largest refiner, cut maintenance plans by 40 percent in the third quarter, Sunday’s figures showed. The oil’s $19.4 billion value accounted for 11.5 percent of total imports, compared with 11.1 percent in June. China also imported 74 aircraft in July, up from 58 a year earlier.
Trade data had shown a slowdown starting in May after the government cracked down on fake invoices that inflated figures earlier in the year. The quality of the data has “improved a lot,” Lu Ting, head of Greater China economics at Bank of America Corp. in Hong Kong, said in a note Sunday.
The improving U.S. economy as well as delays in June trade transactions because of the government crackdown on fraud aided July’s figures, said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong. Authorities will help boost export growth above 5 percent in the coming months by preventing yuan appreciation and increasing export credit insurance, Shen said.
Australia & New Zealand Banking Group Ltd. said in a note that improved liquidity following June’s cash squeeze may have aided trade in July.
Economists’ estimates for July exports ranged from a 4 percent drop to an 8.8 percent increase. The median import projection was for 1 percent growth, with forecasts ranging from a 2.3 percent decline to a 6 percent gain. The trade surplus compared with the median estimate for a $26.9 billion excess.
“Import growth really should be seen as a proxy for domestic demand,” said Helen Qiao, chief Greater China economist at Morgan Stanley in Hong Kong. “Therefore a major surprise on the upside really suggests that domestic demand is in recovery.”
Data showed exports from inland provinces rising at a faster pace than some coastal areas. Shipments from Shanxi more than doubled and Hunan’s were up 61 percent, while eastern Zhejiang’s exports gained 18 percent and Guangdong’s were up 3.9 percent. Shanxi’s mobile-phone exports rose 640 percent in the first half on a local Foxconn Technology Group plant’s production of Apple Inc.’s iPhone, the official Shanxi Daily reported Aug. 5. (Bloomberg)
