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Mia Nulimaimaiti

Sylvia Ma

As China’s exports grew at their fastest pace in 17 months in August – partly owing to front-loaded shipments to the European Union – Beijing has stepped up efforts to de-escalate trade tensions with its second-largest export destination.
Exports rose 8.7 per cent from a year earlier to US$308.65 billion in August, up from a 7 per cent increase in July, according to data released on Tuesday by China’s General Administration of Customs.
The reading beat the expected increase of 7.04 per cent surveyed by Chinese financial data provider Wind, though the growth figure likely benefited from a low base effect, as exports had contracted by 8.8 per cent during the same period last year.
Imports, however, rose by just 0.5 per cent from a year earlier in August, compared with 7.2 per cent growth seen in July.
The data came as a delegation led by China’s commerce vice-minister Li Fei met with EU director general for trade Sabine Weyand in Brussels on Monday to address ongoing trade frictions, China’s commerce ministry said on Tuesday.
“The anti-subsidy case involving electric vehicles is complex and has broad implications, posing significant challenges for China and the EU to reach an agreement through consultation,” the ministry said.
“However, China believes that if the EU demonstrates sincerity and works collaboratively, both sides can resolve their concerns through dialogue.”
China’s trade data shows strong export competitiveness and weak domestic demand
Gary Ng, Natixis Corporate and Investment Banking
The visit is considered a precursor to ministerial-level discussions next week, when Minister of Commerce Wang Wentao will be in Brussels to meet with the EU’s trade commissioner, Valdis Dombrovskis.
The European Union is set to slightly lower the additional tariff rates proposed for electric vehicles imported from China by Tesla and other carmakers, one source told the Post.
“China’s trade data shows strong export competitiveness and weak domestic demand. With the much higher inflation globally, Chinese firms are trying to export for higher profit margins,” said Gary Ng, senior economist at Natixis Corporate and Investment Banking.
Ng said the thriving trade sector was providing a cyclical buffer to China’s economy, where domestic confidence has yet to recover amid lingering weakness in real estate and consumer sentiment.
China set an annual economic growth target of “around 5 per cent” for 2024, with its current economic growth more dependent on external demand, according to Ding Shuang, chief economist for Greater China at Standard Chartered.


“There are still many challenges for China in achieving the 5 per cent GDP growth target,” said Ding, as low import data and weak consumer price inflation readings indicate that China’s economy is grappling with subdued domestic demand.
The EU has already levied provisional tariffs on Chinese-made electric vehicles, while the United States are Canada are making similar moves against imports from China.
But despite the external risks, China is unlikely to see a sharp decline in exports, Ding added, as the US tariffs have not yet fully taken effect, and front-loading is helping to sustain external demand.
The festive season at the end of the year is also expected to provide some support for exports, he added.
In August, China’s shipments to the EU rose by 13.39 per cent, while exports to the US increased by 4.94 per cent, representing a third straight month of positive growth.
Exports to the EU saw their highest rise in two years, when they grew 23.17 per cent in July 2022.
China’s exports to the Association of Southeast Asian Nations, meanwhile, rose by 8.78 per cent in August compared with a year earlier, while exports to Russia rose by 10.37 per cent.
Manufacturers are likely to have front-loaded their orders to Europe before the tariffs came into effect
Ding Shuang, Standard Chartered
Overall, China’s vehicle shipments by volume surged by 39.27 per cent year on year in August, and by 32.67 per cent in value, with both figures representing the fastest expansion recorded this year.
“Manufacturers are likely to have front-loaded their orders to Europe before the tariffs came into effect,” Ding said. “This is a possible reason behind the increase in exports to the EU.”
On Monday, President Xi Jinping met Spanish Prime Minister Pedro Sanchez and Norwegian Prime Minister Jonas Gahr Støre in Beijing.
Xi told Sanchez that he hoped Spain would continue to play “a constructive role” in advancing bilateral ties with the European Union amid escalating trade tensions.
Meanwhile, China also continued to benefit from rising global demand for shipping, with its ship exports increasing by 40.79 per cent in volume and 60.64 per cent in value in August, year on year.
Exports of integrated circuits, meanwhile, also saw a year-on-year rise of 10.64 per cent by volume, and 18.23 per cent by value, during the period.
Elsewhere, China’s August trade surplus stood at US$91.02 billion, compared with US$84.65 billion in July.




Zichun Huang, China economist at Capital Economics, held a relatively positive outlook on trade prospects for the coming months, as the tariffs target only a small portion of China’s outbound shipments.
And he noted that the tariff effects could be mitigated via trade re-routing and exchange rate moves.
“We expect exports to remain robust in the near term, supported by a decline in China’s real effective exchange rate (REER),” he explained.
“We doubt the tariffs announced so far will prevent REER declines from fuelling further gains in China’s global export market share.”
Imports are also likely to rebound in the near term, as a pickup in fiscal spending over the remainder of the year is likely to boost construction activity and increase demand for industrial commodities, he added.
Additional reporting by Finbarr Bermingham


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China’s exports rose by 8.7 per cent from a year earlier in August, while imports rose by 0.5 per cent last month


China’s exports rose by 8.7 per cent from a year earlier in August, while imports rose by 0.5 per cent last month.
