China reported further strength in exports in July, with exports rising 38.1% year on year to $145.5 billion (up from $137 billion in June). This surge drove the trade balance up to a 19 month high at $28.7 billion as imports remained relatively flat at $116.8 billion (up 22.7% off last year). The results point to some potentially interesting trends underway in global trade.
Looking to the chart below it's clear where the strength is coming from; exports. It is interesting that exports continue to go from strength to strength as international trade volumes continue to recover. Indeed the latest result on the export front is the highest on record, this means that somewhere out there someone is still buying, and this will help put somewhat of a floor under the Chinese economy (but then again we all know how rapidly and totally global trade can drop if bad times resurface).
Probably the most concerning aspect, if any, in the data is the static import growth; sure imports are at relatively high levels since the slump, and are generally higher than pre-crisis levels (345 vs 312 in 2008 on a rolling quarterly basis), but it does show China having a slightly lower impact on driving global trade. As a barometer of China's spending (and potentially even its economic health), as well as a high frequency indicator of global trade; Chinese imports will be important to watch over the coming months, particularly if any further strength comes through to the Yuan.
Econ Grapher Analytics www.econgrapher.com
China Customs www.customs.gov.cn
Article Source: http://www.econgrapher.com/11aug-chinatrade.html
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