China: Exports outperformed in July – UOB

Economist at UOB Group Ho Woei Chen, CFA, reviews the latest trade data in the Chinese economy.

Key Takeaways

“China’s export rebound continued into Jul while import maintained a sluggish momentum in USD terms, thus bringing the trade surplus to a fresh record high of US$101.26 bn from previous high of US$97.94 bn in Jun.”

“Export growth in Apr-Jul averaged 14.2% y/y compared to 15.8% y/y in 1Q22, suggesting that activities have likely normalised from Shanghai’s two-month lockdown with the recovery over Jun-Jul.”

“We see downside risks to China’s trade outlook due to increasing external headwinds (higher inflation, sharper pace of global monetary policy tightening), uncertainties from COVID-19 and Russia-Ukraine war that could further disrupt the global supply chain, and the worsening relations with US and Taiwan.”

“Given the high comparison base in 2021 when China’s export and import rose 29.9% and 30.1% respectively, we expect a more moderate growth of 10-12% for export and around 5% for import this year.”