China's exports power ahead but trade with US slumps

The resilience in overseas shipments shows that global demand for Chinese goods remains strong

- Bloomberg

China's export growth unexpectedly accelerated last month in the fastest gain since April, as demand from around the world compensated for the continued slump in shipments to the US.

Total exports rose 7.2% in July from a year earlier to $322 billion, a surprise to most economists who had expected a slowdown from June's upwardly revised increase of 5.9%. The statistical effect of a low base last year likely accounts for part of the upswing in year-on-year terms.

Data released Thursday by the customs authorities showed the pickup was driven by strong growth in shipments to the European Union (EU), Southeast Asia, Australia, Hong Kong and other markets, which more than made up for the fourth month of double-digit declines in US purchases.

"What really supported China's stronger-than-expected overseas shipments in the past three months was exports to non-US markets," said Jacqueline Rong, chief China economist at BNP Paribas SA.

The resilience in overseas shipments comes despite the high tariffs imposed by the US, showing that global demand for Chinese goods remains strong and still provides a significant driver for the domestic economy.

Beijing and Washington face a 12 August deadline to prolong their 90-day tariff truce. While the Chinese side said the two nations agreed to extend it after talks in Sweden last month, US officials have signaled President Donald Trump will make the final call on maintaining the deal.