China's exports grow 8.6% in June

Hong Kong: China's exports beat forecasts in June, customs data showed Friday, while imports grew less than expected.

Exports grew 8.6 per cent from the same time last year to hit $307.8 billion, according to data released by Chinese customs, beating estimates of about 7.4 per cent to 8 per cent growth. Imports however fell 2.3 per cent from a year earlier to $208.8 billion. China's strong exports for June led to its trade surplus widening to $99 billion, up from $82.6 billion in May. The growth in exports comes as China faces escalated trade tensions with the U.S. and Europe. The US and Europe have ramped up tariffs on Chinese-made electric cars. “Tariffs from the US and EU won't significantly impact overall exports in the short run. They only target a small portion of Chinese exports,” Zichun Huang of Capital Economics wrote in a note, adding that the effects of tariffs can be dampened through “trade rerouting and exchange rate adjustments.” “Overall, we expect exports to remain a near-term tailwind to economic growth,” she said.

Import volumes will likely rebound soon as the uptick in recent government bonds issued will likely result in increased infrastructure spending, thereby lifting demand for industrial commodities, Huang wrote. The 10 nations of the Association of Southeast Asian Nations remained the largest destination for Chinese products, with exports to ASEAN growing 10.7 per cent year-on-year in the January to June period. In June, China exported $49.8 billion to ASEAN countries.

Exports to the US grew just 1.5 per cent in the January to June period compared to the same time last year, while shipments to the European Union declined 2.6 per cent. Steel, automobiles, home appliances and ships have been the fastest growing categories of Chinese exports this year. China has shipped 2.93 million automobiles in the first six months of the year, as well as 29.8 million ships. China is facing accusations from the US and the European Union of overproducing and flooding overseas markets with cheap electric vehicles. Both have worked to impose tariffs on such vehicles. Meanwhile, China is also concerned that duties imposed on its EVs would reduce exports amid weakening demand at home.