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© Reuters. File picture: On December 12, 2019, a worker drives a truck with containers in a logistics center near the port of Tianjin, China. REUTERS/Yilei Sun
BEIJING (Reuters)-China’s exports in June grew much faster than expected, as strong global demand driven by the relaxation of lockdowns and vaccinations on a global scale exceeded the virus outbreak and port delays.
Customs data on Tuesday showed that import growth also exceeded expectations, but the growth rate has slowed since May, and high raw material prices boosted the import value.
As Beijing contained the pandemic much earlier than its trading partners, the world’s largest exporter achieved a solid economic recovery from the recession caused by the coronavirus in the first few months of 2020.
Exports in US dollars in June rose by 32.2% year-on-year, compared with 27.9% in May. Analysts surveyed by Reuters had expected an increase of 23.1%.
Louis Kuijs, head of Asian economics at Oxford Economics, said: “Exports unexpectedly rose in June, which helped to get rid of the impact of the temporary closure of the Shenzhen port and other supply chain bottlenecks.”
“The overall dollar data shows that the actual continuous shipments in June remained unchanged after falling earlier from the record level at the end of 2020.”
In recent months, there has been some pressure on China’s trade performance, mainly due to global semiconductor shortages, logistics bottlenecks, and rising costs of raw materials and freight.
Nevertheless, the global easing of COVID-19 lockdown measures and vaccination campaigns seems to have supported the strong growth in global demand for Chinese goods.
The strong shipments last month highlighted some reliable investigations by overseas factories. A measure of factory activity in the United States climbed to a record high in June, while Eurozone corporate growth accelerated at the fastest rate in 15 years. [nL2N2O42C6 nL2N2O50ED]
The data also showed that last month imports increased by 36.7% year-on-year, exceeding the expected 30.0%, but lower than the 51.1% in May, which was the highest growth rate in a decade.
Pandemic uncertainty
Li Kuiwen, a spokesperson for the General Administration of Customs of China, said that China’s trade may slow down in the second half of 2021, mainly reflecting the statistical impact of last year’s high growth rate.
Li Keqiang also stated at a press conference in Beijing earlier in the day that although China’s trade still faces uncertainty due to the global pandemic, the risk of imported inflation is controllable.
“But overall, we believe that China’s foreign trade still has hope of achieving relatively rapid growth in the second half of the year,” he said.
China’s trade surplus last month was US$51.53 billion, while public opinion polls predicted a trade surplus of US$44.2 billion in May and a surplus of US$45.54 billion.
Last month, the world’s second largest economy contained a sporadic coronavirus outbreak in one of the main export centers in southern Guangdong Province.
However, exporters are struggling to cope with higher raw material and freight costs and logistics bottlenecks.
The prices of commodities such as coal, steel, and iron ore have soared this year, thanks to the relaxation of the epidemic blockade in many countries and abundant global liquidity.
Reuters calculations based on customs data show that China’s trade surplus with the United States widened to 32.58 billion U.S. dollars in June, up from 31.78 billion U.S. dollars in May.
Senior officials from China and the United States began communicating in June to resolve mutual concerns, and the Biden administration is reviewing trade policies between the world’s two largest economies before the first phase of the agreement expires at the end of 2021.
Beijing started buying corn from the United States in June, but it is still far behind its promise to buy more agricultural products from the United States in the first phase of the agreement.
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