Beijing (AFP) – China’s exports rose more than expected in June, official data showed Monday, after Washington and Beijing agreed on a tentative deal to lower swingeing tariffs on each other. Data from the General Administration of Customs said exports climbed 5.8 percent year-on-year, topping the five percent forecast in a Bloomberg survey of economists. Imports rose 1.1 percent, higher than the 0.3 percent gain predicted, marking the first growth this year. China’s exports reached record highs in 2024 — a lifeline to its slowing economy as pressures elsewhere mounted.
Beijing’s efforts to sustain growth have been hit by a bruising trade war with the United States, driven by President Donald Trump’s sweeping tariffs. However, the two de-escalated their spat with a framework for a deal at talks in London last month. Monday’s customs figures showed Chinese exports to the United States surged 32.4 percent in June, having fallen the month before, according to an AFP calculation based on official data.
“Growth in export values rebounded somewhat last month, helped by the US-China trade truce,” Zichun Huang, China economist at Capital Economics, said. “But tariffs are likely to remain high, and Chinese manufacturers face growing constraints on their ability to rapidly expand global market share by slashing prices,” Huang added. “We therefore expect export growth to slow over the coming quarters, weighing on economic growth.”
Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said the figures showed Chinese firms were still “frontloading” exports to the United States — accelerating shipments in anticipation of further tariffs to come. The strong export figures “help to partly offset the weak domestic demand and likely keep GDP growth around the government target of five percent in the second quarter,” Zhang stated. “But the outlook for the second half of the year is unclear, as the frontloading of exports (to the United States) will fade out sometime,” he added.
Customs official Wang Lingjun told a news conference on Monday that Beijing hoped “the US will continue to work together with China towards the same direction,” state broadcaster CCTV reported. The tariff truce was “hard won,” Wang said. “There is no way out through blackmail and coercion. Dialogue and cooperation are the right path,” he added.
– Stuttering growth –
Analysts say China’s economy is expected to have expanded more than five percent in the second quarter thanks to its strong exports. Official figures are due to be released on Tuesday. However, they also warn that Trump’s trade war could cause a sharp slowdown in the final six months of the year. Beijing is targeting an overall expansion of around five percent in 2025 — the same as last year, but a figure considered ambitious by many experts.
First-quarter growth came in at 5.4 percent, beating forecasts and putting the economy on a positive trajectory. Beijing has struggled to sustain growth since the pandemic as it battles a prolonged debt crisis in the property sector, chronically low consumption, and high youth unemployment. Data released last week showed that consumer prices edged up in June, barely snapping a four-month deflationary dip, but factory gate prices dropped at their fastest clip in nearly two years.
Many economists argue that China needs to shift towards a growth model propelled more by domestic consumption than the traditional key drivers of infrastructure investment, manufacturing, and exports. Beijing has introduced a slew of measures since last year in a bid to boost spending, including a consumer goods trade-in subsidy scheme that briefly lifted retail activity.
© 2024 AFP
