The scale of the beat, on both exports and imports, is the story here, since it suggests the AI investment cycle and tariff front-loading are doing more to support Chinese trade than the Reuters poll consensus had assumed just a day earlier. The import surge to a five year high is arguably the more significant number for the broader growth debate, since it hints at firmer domestic demand for components and inputs than the market had been pricing, even as the parallel plunge in crude oil imports to a near decade low complicates any simple read on the health of underlying Chinese demand. With GDP due Wednesday, this print raises the bar for that release and adds to the case that China’s growth engine, while still facing headwinds from the property slump and global uncertainty, is proving more resilient in the near term than feared.
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China’s trade data didn’t just beat expectations, it blew past them on both sides of the ledger.
Summary:
- China’s exports rose 27% year on year in June, customs data showed, their best performance in four months and the fastest pace since 2021, well above the 18.2% rise economists had forecast and up from 19.4% in May
- Imports jumped 36% year on year, a five year high, compared with forecasts of 24% growth and a 27.4% gain in May
- The trade surplus came in at around 125.6 billion dollars, up from 105.4 billion dollars in May and above forecasts of roughly 121 billion dollars
- Strong demand for AI related technology products, front-loading of U.S. bound shipments ahead of possible tariff hikes, and aggressive pricing by Chinese exporters all helped support the export beat
- China’s crude oil imports fell to their lowest level in nearly a decade, even as broader import growth surged
- China is due to release its second quarter GDP figure on Wednesday, with first quarter strength having since given way to cooling momentum and continued concern over weak domestic demand
China’s trade data smashed forecasts in June, with both exports and imports coming in far stronger than expected as AI related demand and a rush of shipments ahead of possible new U.S. tariffs offset broader worries about the Iran war and slowing global growth. Exports rose 27% year on year, customs data showed, their best showing in four months and the fastest pace since 2021, well above the 18.2% economists had forecast and up from 19.4% in May. Imports jumped 36%, a five year high, against forecasts of 24% growth and May’s 27.4% gain.
The trade surplus widened to around 125.6 billion dollars from 105.4 billion dollars in May, above expectations of roughly 121 billion dollars. Strong demand for semiconductors and other AI linked technology products provided an important cushion for manufacturers in China’s 20 trillion dollar economy, even as disruption from the Middle East conflict and a prolonged property downturn continue to weigh on broader growth. Separate manufacturing data for June had already shown overseas demand beginning to recover, though factory-gate prices kept falling as companies cut prices to win business from customers squeezed by higher energy costs tied to the conflict.
Exporters also benefited as U.S. retailers brought forward orders by four to six weeks to stock up for Black Friday and Christmas sales ahead of expected tariff increases later this year, even as uncertainty over the broader trade relationship remains elevated following President Trump’s May visit to Beijing, which failed to deliver the breakthroughs many had anticipated. One notable outlier in the data was crude oil imports, which fell to their lowest level in nearly a decade even as overall import growth surged, a divergence that complicates any straightforward read on the strength of domestic demand.
Strong exports had already helped China outperform expectations in the first quarter, though momentum has cooled since, reinforcing concerns that weak domestic demand leaves the economy exposed if external conditions soften and adding to the case for further policy support. China is due to release its second quarter GDP figure on Wednesday, a release that now carries added significance given how sharply Tuesday’s trade data beat expectations.
This article was written by fl6553e4b45d84486a91658a8b3f02bf22 at investinglive.com.