China’s June trade data shows exports rising but imports falling.

BEIJING:

China’s exports rose 8.6 percent in June from a year earlier and imports unexpectedly shrank 2.3 percent, customs data showed on Friday, suggesting manufacturers are placing advance orders in anticipation of tariffs from a growing number trading partners.

A Reuters poll of economists had forecast exports to rise 8.0% in value and imports to rise 2.8%, compared with 7.6% and 1.8%, respectively, in the previous month.

Stronger-than-expected exports were one of the few bright spots for an economy that is otherwise still struggling for momentum despite official efforts to boost domestic demand after the pandemic. The prolonged decline in real estate and worries about jobs and wages are weighing heavily on consumer confidence.

But as the number of countries considering accelerating restrictions on Chinese goods grows, so does the pressure on its exports to support progress towards the government’s economic growth target of around 5 percent this year.

China’s trade surplus widened to $99.05 billion, compared with a forecast of $85 billion and $82.62 billion in May. The United States has repeatedly pointed to the surplus as evidence of one-sided trade favoring the Chinese economy.

Washington in May raised tariffs on a range of Chinese imports, including quadrupling tariffs on Chinese electric vehicles to 100 percent. Brussels last week confirmed it would also impose tariffs on EVs, but only up to 37.6%.

Tesla is raising prices on some cars in Europe and says new EU tariffs on Chinese vehicles are to blame.

Chinese exporters are also at risk of participating in the US election in November if either major party proposes new trade restrictions.

Turkey last month announced it would impose an additional 40 percent tariff on Chinese-made electric vehicles, and Canada said it was considering restrictions.

Meanwhile, Indonesia plans to impose import duties of up to 200% on textile products, which come mainly from China. India eyes cheap Chinese steel. and talks with Saudi Arabia on a free trade deal have reportedly stalled over dumping concerns.

Analysts expect China to implement more policy support measures in the near term, and the government’s commitment to boost fiscal stimulus appears to be helping domestic consumption to a higher pace.

Economists and investors await the Tuesday Plenary Session on July 15-18, with hundreds of top Chinese Communist Party officials gathering in Beijing for a meeting held every five years.