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 indicated that exports climbed 5.8 percent year-on-year, surpassing the five percent forecast in a Bloomberg survey of economists. Imports also saw an increase of 1.1 percent, higher than the predicted 0.3 percent gain, marking the first growth this year.
China’s exports reached record highs in 2024, providing a lifeline to its slowing economy as pressures mounted elsewhere. Beijing’s efforts to sustain growth have been hindered by a bruising trade war with the United States, driven by President Donald Trump’s sweeping tariffs. However, the two countries de-escalated their spat with a framework for a deal during talks in London last month.
Monday’s customs figures revealed that Chinese exports to the United States surged 32.4 percent in June, rebounding from a decline 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,” said Zichun Huang, China economist at Capital Economics. “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, noted that the figures showed Chinese firms were still “frontloading” exports to the United States, accelerating shipments in anticipation of further tariffs to come. He observed that 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.” However, he cautioned that “the outlook for the second half of the year is unclear, as the frontloading of exports (to the United States) will fade out sometime.”
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,” as reported by state broadcaster CCTV. The tariff truce was described as “hard won,” according to Wang, who emphasized that “there is no way out through blackmail and coercion. Dialogue and cooperation are the right path.”
Analysts suggest that China’s economy is expected to have expanded more than five percent in the second quarter due to its strong exports, with official figures set to be released on Tuesday. However, they also warn that Trump’s trade war could lead to a sharp slowdown in the final six months of the year.
Beijing is targeting an overall expansion of around five percent in 2025—similar to last year—though many experts find this figure ambitious. First-quarter growth was recorded at 5.4 percent, surpassing forecasts and putting the economy on a positive trajectory. Nevertheless, Beijing has faced challenges in sustaining growth since the pandemic, grappling with 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 breaking a four-month deflationary dip, while factory gate prices fell 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 rather than the traditional key drivers like infrastructure investment, manufacturing, and exports. In response, Beijing has introduced a slew of measures since last year aimed at boosting spending, including a consumer goods trade-in subsidy scheme that briefly lifted retail activity.
© 2024 AFP
