The China export boom continued in July as strong global demand for artificial intelligence-related technology helped drive overseas shipments higher despite trade tensions with major economies.
According to AFP, exports rose 23.9 per cent year-on-year in July, exceeding a Bloomberg forecast of 23 per cent, while imports increased 27.5 per cent.
The latest figures from China’s General Administration of Customs showed technology products playing an increasingly important role in the country’s trade performance.
Exports of computers and related components jumped 45.2 per cent during the first seven months of the year as companies worldwide increased investment in artificial intelligence infrastructure.
Julian Evans-Pritchard of Capital Economics said strong demand for electronics and green technology continued to keep China’s export and import values elevated.
China export boom supports economy
China has increasingly relied on overseas demand to support economic activity as domestic consumption remains under pressure.
The country recorded a record trade surplus of nearly $1.2 trillion last year, providing support for manufacturers despite weaker spending at home.
China’s trade surplus had already reached about $687 billion by the end of July, putting it on course for another exceptionally strong year.
The widening trade gap has raised concerns among some of China’s major trading partners, particularly in Europe, where policymakers fear cheaper Chinese goods could place additional pressure on domestic manufacturers.
Beijing has repeatedly denied deliberately pursuing large trade surpluses.
China’s Politburo also called for more balanced trade development during a meeting in late July.
Imports also record strong growth
Imports rose 27.5 per cent in July compared with the same month last year.
Although the increase remained strong, it was below the 36 per cent surge recorded in June and missed Bloomberg’s forecast of 29.5 per cent.
Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said exports continued to provide important support for China’s economy.
He predicted more intense discussions between Beijing and its major trading partners over measures aimed at reducing trade imbalances.
US-China trade tensions persist
China’s trade growth has continued despite pressure from geopolitical instability and lingering tensions between Beijing and Washington.
Exports to the United States increased 17 per cent year-on-year in July.
China’s trade surplus with the US reached nearly $171 billion during the first seven months of the year.
Relations between the two economies remain strained despite attempts to ease the trade dispute that dominated much of last year.
Tensions increased again this week after Beijing announced restrictions on drone exports to the United States and block listed six companies following US sanctions linked to forced labour and national security concerns.
China and the US reached a temporary trade truce after President Donald Trump met Chinese President Xi Jinping in October.
The relationship is expected to face further scrutiny ahead of Xi’s scheduled state visit to the United States in late September.
