China’s exports were solid in July, despite a drop in volume, according to customs statistics released on Saturday, with analysts highlighting a comeback in port activity but warning that the recent spread of the Delta variant could be a drag on development.
Outbound shipments from the world’s second-largest economy have remained resilient this year, buoyed by demand for items such as medical equipment and technology required to work from home – with a rebound in coronavirus outbreaks elsewhere increasing reliance on Chinese products.
Business activity in China has largely returned to normal following rigorous lockdowns and mass testing, while the country is now ratcheting up measures to control the spread of the Delta form, with minor outbreaks found in more than a dozen regions.
However, commerce remained robust in July, with exports increasing by 19.3 percent year on year, somewhat less than predicted, according to the Customs Administration.
Analysts polled by Bloomberg predicted a 19.9 percent year-on-year increase, following a 32.2 percent jump in June.
Meanwhile, imports increased by 28.1 percent over the same period last year, according to official figures.
According to the most recent numbers, China’s overall trade surplus was $56.6 billion in July, up from $51.5 billion in June.
Official figures show that electronic items continued to drive export growth in the first seven months of the year, despite a drop in demand for mask exports from the previous year.
Irene Cheung, senior strategist at ANZ Research Asia, remarked this week that there has been a “rebound in port activities” following the previous disruption.
“On the other hand, the rise in commodity prices may have boosted imports,” she added.
China has been attempting to reduce the rising costs of bulk commodities, which have put a strain on smaller businesses.
However, ING economists warned in a report that tougher social distancing measures coupled with China’s Covid-19 recovery in recent weeks are expected to do some damage, even if the impact may be mitigated to some extent by exports of electronic parts and products.
“Aside from the Delta variant, China is coping with other negative shocks to its near-term growth,” noted Nomura economists this week.
In addition to natural disasters including as severe rain and flooding in central Henan province, which have slowed economic activity, Beijing has tightened regulations in the property sector and high-polluting industries.
Photo: AFP / STR