BEIJING: Chinese trade enjoyed surprise growth in June as the world slowly emerges from economy-strangling lockdowns, though officials warned of headwinds for recovery owing to the spread of the pandemic.
The figures come days before the release of data expected to show the world’s No 2 economy returned to expansion territory in the second quarter following a contraction in the first three months.
The 2.7% growth in imports was the first since December and was much better than the 9% contraction forecast in a Bloomberg News poll, while exports were up 0.5%, which also confounded expectations of shrinkage.
The readings followed May’s 16.7% collapse in imports and 3.3% retreat in exports.
Customs spokesman Li Kuiwen told a press briefing Tuesday that imports and exports showed “signs of recovery and stability” in the second quarter, adding that China has been “forging ahead” in efforts to ensure stability in areas such as employment, foreign trade, and investment.
But he cautioned that the external environment is “more grim and complicated” now, with the Covid-19 outbreak plunging the global economy into a deep recession and international trade and investment experiencing sharp contractions.
In the first half, exports dropped 6.2% from a year ago while imports fell 7.1%, official data showed, reflecting the hit from the pandemic which first surfaced in central China.
The country’s economy is expected to have grown in April-June, having shrunk 6.8% in the preceding three months – the first quarterly contraction since China began logging such data in the early 1990s – as the planet was battered by the deadly virus.
Beijing’s trade surplus with the US – a major cause of anger in the White House – narrowed slightly to US$29.4 billion in June, a 1.7% drop from US$29.9 billion a year earlier.
Tensions have been rising on multiple fronts as the superpowers trade barbs over the virus, a tough new security law in Hong Kong, and Chinese policies in Tibet and Xinjiang.
But Li said the US and China will continue to jointly implement a phase one trade deal signed in January that marked a truce in their long-running trade war.
While China experienced some recovery in trade last month, analysts warn it could lose momentum, with exports likely hit by weak external demand owing to renewed lockdowns in key trading partners.
HSBC chief China economist Qu Hongbin said in a recent report that “the gauges for new export orders in China’s purchasing managers’ index … still contracted in recent months”, referring to the key indicator of factory activity.
But imports were likely supported by continued improvement in domestic demand and commodity prices, he said.
A recent Capital Economics report said higher demand for some products, including medical equipment, “has helped put a floor under trade flows”.
“In China, for instance, without the support from these products, exports would have fallen by over 10% year-on-year in May,” it said.