China’s year-on-year export growth rate accelerated in August thanks to demand for advanced technology, artificial intelligence-related products and automobiles. The foreign trade surplus thus increased to 119.1 billion USD (2.5 trillion CZK) from July’s 112.5 billion USD. This emerges from data published today by China’s customs office. The data provides significant support for the country’s economy, which is plagued by stagnant domestic demand.
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Exports continue to grow, but domestic economy weakens
Exports expressed in dollars increased year-on-year by 25 percent, accelerating from 23.9 percent in July. Imports rose by 28.2 percent, having increased by 27.5 percent in July. Export growth was in line with expectations, while imports grew more slowly than analysts had anticipated.
The gap between exports and weakening domestic activity underscores that Beijing remains dependent on foreign demand. Policymakers are trying to revive consumption and investment to meet this year’s growth target in the range of 4.5 percent to five percent. “China continues to rely on exports to support the economy,” said Qi-Wei Zhang, president and chief economist at Pinpoint Asset Management. After the pace of economic growth slowed to 4.3 percent in the second quarter, further statistical data released last month showed that industrial production and retail sales slowed at the beginning of the new quarter. Fixed asset investment then recorded a decline over seven months. The real estate market, once among the main drivers of growth, is still in a downturn lasting several years.
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Trade surplus with the United States increased
The trade surplus with the United States increased to 29.18 billion USD from July’s 28 billion USD. The trade truce between Beijing and Washington, which was concluded at the end of last year at a meeting of the presidents of both countries, has so far persisted despite occasional friction. Both governments are now considering mutual tariff reductions on 30 billion USD worth of goods. Donald Trump and Xi Jinping are scheduled to meet in the US this month, but the exact date has not yet been confirmed, Reuters agency reported.
For the first eight months of this year, the foreign trade surplus amounted to 805.51 billion USD. It is thus on track to exceed the one trillion USD threshold for the second consecutive year.
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Source: ČTK
