China’s trade surplus hit a record high last month on the back of a surge in exports.
China’s prospects have been the subject of much discussion in the past few months, as concerns have been raised that the world’s second largest economy might be slowing down. But it has lost none of its appeal for foreign buyers, it appears, since the country posted a record trade surplus last month as a result of a surge in exports.
Shipments to overseas markets rose by 14.5 per cent in July from the same month last year, according to figures from the General Administration of Customs, taking the total to $212.9 billion. That’s more than twice the growth rate recorded in June and the quickest rise in over a year. At the same time, imports declined by 1.6 per cent to $165.6 billion.
Overall, this means that July’s trade surplus stood at $47.3 billion – 50 per cent higher than in June, 170 per cent up on the same month in the previous year, and the biggest surplus ever recorded.
Trading prospects for China are certainly bright – the overall volume of trade for the nation in July was $378.5 billion. Increasing exports are largely thought to be the result of improvement in global markets. Rising consumer confidence and promising economic data from key export markets such as several EU economies and the US are likely to have made a major difference.
But the fall in imports might suggest that the worry lies within China’s borders. Speaking to Reuters, senior economist at Credit Agricole CIB in Hong Kong Dariusz Kowalczyk said that domestic demand might appear soft and potentially put pressure on growth. He expects Beijing to take new steps to boost the domestic economy and increase consumption.
Even so, there have been some factors contributing to the decline that are outside of China’s control.
Fortune reports that China imported 18 per cent more iron ore to make steel in the year to the end of July, but average prices have slumped by 15 per cent.
Coal imports also slipped by 2.2 per cent while average prices were 15 per cent down from the previous year. For now, it appears at least that exports will keep optimism high on the subject of China’s future.
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