China’s export growth held up, but imports offer hope for domestic demand

China’s exports fell short of expectations in July amid multiple headwinds, although a rise in imports offered a sign of improving domestic demand

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New cars wait for transportation near a Sallaum Lines ro-ro ship seen by the dock in Yantai in east China’s Shandong province. Photo: AP

Published: 11:17am, 7 Aug 2024Updated: 5:35pm, 7 Aug 2024

China’s exports grew less than expected in July, with analysts holding mixed views towards the outlook for the second half of the year amid uncertainties surrounding overseas demand and global consumer sentiment, coupled with heightened geopolitical tensions.

However, analysts also said the silver lining of better-than-expected import growth last month pointed towards an initial sign of recovery in domestic demand, driven by demand from the electric vehicle sector.

Exports, which have been a major growth engine in the first half of the year, grew by 7 per cent in July from a year earlier to US$300.56 billion, according to customs data released on Wednesday.

But the reading, which was partly helped out by front-loading ahead of the implementation of tariffs from the United States and European Union, fell short of the expected growth of 9.5 per cent surveyed by Chinese financial data provider Wind, and was lower than the 8.6 per cent increase in June.

“There have been several headwinds likely contributing to the softer-than-expected reading,” said HSBC economists Erin Xin and Taylor Wang.

“A decline in the manufacturing purchasing managers’ indices in developed markets reflected weaker final demand. Meanwhile, the implementation of some additional tariffs by trading partners may have also affected exporting sentiment.”