China's Exports Growth Slows; Imports Rise More Than Forecast

ChinaTrade 090817

China's exports increased at a slower pace in August on softening global demand, while imports growth exceeded expectations.

Exports increased 5.5 percent year-on-year in August, slower than July's initially estimated 7.2 percent growth, data from the General Administration of Customs revealed Friday. Shipments were forecast to grow 6 percent.

At the same time, imports advanced 13.3 percent annually, faster than the expected growth of 10 percent.

As a result, the trade surplus totaled $42 billion in August versus the expected level of $48.5 billion.

The trade surplus with the US rose to $26.2 billion as exports gained 8.4 percent.

In yuan terms, exports gained 6.9 percent and imports by 14.4 percent. Economists had forecast exports to grow 8.7 percent and imports to rise 11.7 percent.

The trade surplus came in at CNY 286.5 billion, well below the forecast of CNY 335.7 billion.

Renminbi strength is probably not to blame for cooling export volumes - exporters have yet to meaningfully raise their US dollar prices in response to recent exchange rate movements, Julian Evans-Pritchard, an economist at Capital Economics,

Looking ahead, the economist said further downside to export growth should be limited by the fairly positive outlook for China's main trading partners.

But with the headwinds to domestic demand from policy tightening increasing, the slowdown in import growth has further to run, the economist added.

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