China’s exports grew 20.4 percent in July from a year earlier, accelerating from 17.9 percent in June, while imports increased by 22.9 percent in July over a year ago, the General Administration of Customs said Wednesday.
However, imports are expected to grow faster than exports in the second half of the year due to weakening external demand, experts said.
Trade in July registered an increase on a monthly basis, with the value of exports increasing by 8 percent and imports by 2.8 percent compared with June.
That helped the trade surplus in the first seven months widen to $76.2 billion, from about $45 billion in the first half of the year, though down 8.7 percent compared with the same period of last year, according to the Customs.
“All these robust readings are suggesting that both China’s competitiveness and domestic demand are in relatively good shape,” Lu Ting, China economist at Bank of America-Merrill Lynch, said in an e-mail statement to the Global Times.
China’s trade with the EU, China’s largest trade partner, grew by 21.1 percent in the first seven months, while trade with No.2 partner US increased 18.5 percent, the Customs said.
However, China’s exports to the top two trade partners might slow down in the last two quarters of the year, in view of the weaker than expected economic growth in the US and the lingering debt crisis in the European Union, said Xu Changwen, a researcher at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.
But the debt crisis in Europe this year wouldn’t be as severe as last year, and the recent turmoil in the US financial markets may not last long and is most unlikely to lead to recession, Mei Xinyu, another researcher at the Ministry of Commerce, told the Global Times.
The global stock markets tumbled recently as the US lost its prized AAA credit rating by Standard & Poor’s Friday triggered by its debt problem, while the European central bank announced recently it was ready to buy bonds from Italy and Spain, trying to prevent debt crisis from rippling to other member countries after Greece.
The US Federal Reserve promised Tuesday to keep interest rates near zero for at least two more years, which successfully reassured investors but indicated a run of weak dollar.
“China’s yuan will continue to appreciate against the dollar, and that will boost imports,” Xu said.
The increased imports will help reduce trade surplus and constrain China’s huge foreign reserves from further growing, thus easing the pressure for financial investment due to the fall of the dollar value, Xu told the Global Times.
Also, stronger imports and less surplus will help relieve inflation to some extent, as the central bank doesn’t have to release extra money supply equal to increased foreign reserves in order to keep its exchange rate within a certain range, Xu said.