On Thursday, China reported its trade data that was improved than the expectation instead of the growing economic pressure from raised United States tariffs. The world’s second economic giant said that it’s United States dollar-denominated exports in the previous month rose 3.3 percent from the last year whereas imports cut down to 5.6 percent during the same time. According to the customs data, the previous month overall trade surplus of China was $45.06 billion.
The data reflects that in July, the trade surplus with the United States was $27.97 billion that was less than the last month’s $29.92 billion. The trade surplus of the Asian economist giant with the U.S. from Jan to July totaled $168.5 billion. Allianz Global Investors’ portfolio manager, Li Yu said weaker yuan vs. the U.S. dollar and the world’s other currencies helped the industrialists of China to sell their goods internationally. That’s regardless of the imposing of the United States 25 percent tariff on 200 billion dollars of Chinese goods in May after the negotiations of trade stalled.
The devaluing yuan is assisting the Chinese exporters in exporting not only to the United States because it reduces the influence of the tariff hike as well as help them to export to more countries – Yu added.
Whereas, the economists were expecting that the last months of exports of China to fall by two percent from the previous month over the same period, similarly imports to decline by 8.3 percent. According to the Reuters poll, the whole July trade surplus of the country forecast to about 40 billion dollars.
Customs statistics revealed that the Chinese exports fell 1.3 percent in June year on year whereas imports fell 7.3 percent during the same duration. According to figures, that month trade surplus was $50.98 billion.
Stance for China
Consultancy Capital Economics’ senior China economist, Evans-Pritchard said that the July trade momentum might not last. After the release of China’s trade statistics he wrote that watching forward, Chinese exports still seems to stay subdued in the upcoming quarters as any support from a pathetic renminbi should dominate by additional tariffs from the United States and increases the external weakness.
He added although exports of August might help from around front-loading before the latest tariffs apply on 1st September. Therefore, this collision will possibly be less than it was at the start of the earlier tariffs’ rounds as storage facilities of U.S. port have lessened spare. For the time being, the latest slowdown in national demand seems set to weigh up the import volumes.
The economy of China – the world second-largest is developing at a slower speed amid because of an mounting trade war between Washington and Beijing that begin as a tariff war but in recent times spilled into currency and technology. In July, China officially announced that the country’s economy grew 6.2% in the 2nd quarter from the last year, the slowest rate in about twenty-seven years.
Beijing makes better monetary policy and announced financial measures, for example, cuts to speed up economic activity. However, growth in China could decelerate even more if the Trump administration goes ahead with the latest elevated tariffs upcoming month.