China-dollar denomination exports rose 7.2% while imports fell 1.4% from a year ago Friday showed data from the general administration of customs of the country.
Economists surveyed by Reuters had expected that China’s exports denominated by dollar would fall by 0.2% from a year ago, while the forecast of 1% as a year ago was forecast to rise by 1%.
In June, China’s dollar-denominated exports rose 0.5% year-on-year, while imports rose 2.7% over the same period.
In July, China posted a trade surplus of $ 62.33 billion, beating the $ 42 billion economists had expected. China’s trade surplus in June was $ 46.42 billion.
Despite the coronavirus pandemic that is hitting global demand, exports from China continued when exports of medical supplies jumped in the first half of the year.
The trend continued in July, noted Martin Rasmussen, China economist at Capital Economics.
“Much of the recent resistance to exports is due to shipments of masks, medical products and work-from-home equipment,” Rasmussen wrote in a note following the release of data.
Rasmussen said China’s stimulating lead is expected to continue in the coming months – and this would support a rebound in imports.
Foreign demand is also likely to continue to recover as disruptions related to pandemic convenience. However, the height to China’s exports may be limited because demand for pandemic-related products is likely to be temporary, he added.
Continued trade tensions in the US-China also pose a downside risk.
Senior officials from both countries are scheduled to review the implementation of their “phase one” trade treaty next week.
The new week’s meeting is likely to be “really challenging”, said Ronald Wan, non-executive chairman of Partners Financial Holdings in Hong Kong.
China’s general demand has been dragged down by the pandemic, making it difficult for the country to fulfill its trade commitments in phase one trade agreement, Wan told CNBC’s Street Signs.
Beijing is also focusing on an ‘internal economic cycle’ with production and consumption taking place in the country itself. This signals that the Chinese government does not expect a really positive outcome from the trade talks, according to Wan.
.
