Trade surplus grows on weak domestic demand
By Wang Yanlin |
July 11, 2012, Wednesday
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Print Edition
Print Edition
CHINA'S trade surplus expanded sharply last month as exports outperformed imports - an indication of insufficient domestic demand.
Exports in June increased 11.3 percent year on year to US$180.2 billion, the General Administration of Customs said yesterday, while imports rose 6.3 percent to US$148.5 billion.
That left a trade surplus at US$31.7 billion last month, up 42.9 percent from a year earlier and higher than May's US$18.7 billion and April's US$18.4 billion.
"The surge in trade surplus is caused more by weak imports than strong exports," said Xue Jun, an analyst at CITIC Securities Co. "However, it may renew pressure for China to appreciate the yuan."
Both exports and imports in June grew at a slower pace compared to May, when exports jumped 15.3 percent and imports gained 12.7 percent. But last month's figures were much better than those in April when exports were up just 4.9 percent and imports reported a mere 0.3 percent rise.
"June export growth suggests external demand continues to hold up, though the outlook remains weak," Zhou Hao, an economist at Australia and New Zealand Banking Group Ltd, said, adding that sluggish domestic demand was one of the main reasons for the weak import figures.
Zhou said monetary policy easing would be needed to return China to a cyclical rebound in the rest of the year.
He said a larger trade surplus would put pressure on the yuan to appreciate and forecast that it would strengthen by 1.5 percent by the end of the year.
On the whole, China's trade performance in the first half remains stable, the Customs said, citing unfavorable factors including a slowing economy, the global economic downturn, rising production costs for exporters and spreading trade protectionism.
China's trade value advanced 8 percent on an annual basis to US$1.84 trillion in the first six months, the Customs data showed. The trade surplus in the period climbed 56.4 percent from a year earlier to US$68.9 billion.
Emerging markets continued to weigh more in China's trade, while traditional markets reported little growth. Trade with the European Union rose 0.7 percent in the first six months, while deals with Japan declined 0.2 percent, Customs data showed.
Exports in June increased 11.3 percent year on year to US$180.2 billion, the General Administration of Customs said yesterday, while imports rose 6.3 percent to US$148.5 billion.
That left a trade surplus at US$31.7 billion last month, up 42.9 percent from a year earlier and higher than May's US$18.7 billion and April's US$18.4 billion.
"The surge in trade surplus is caused more by weak imports than strong exports," said Xue Jun, an analyst at CITIC Securities Co. "However, it may renew pressure for China to appreciate the yuan."
Both exports and imports in June grew at a slower pace compared to May, when exports jumped 15.3 percent and imports gained 12.7 percent. But last month's figures were much better than those in April when exports were up just 4.9 percent and imports reported a mere 0.3 percent rise.
"June export growth suggests external demand continues to hold up, though the outlook remains weak," Zhou Hao, an economist at Australia and New Zealand Banking Group Ltd, said, adding that sluggish domestic demand was one of the main reasons for the weak import figures.
Zhou said monetary policy easing would be needed to return China to a cyclical rebound in the rest of the year.
He said a larger trade surplus would put pressure on the yuan to appreciate and forecast that it would strengthen by 1.5 percent by the end of the year.
On the whole, China's trade performance in the first half remains stable, the Customs said, citing unfavorable factors including a slowing economy, the global economic downturn, rising production costs for exporters and spreading trade protectionism.
China's trade value advanced 8 percent on an annual basis to US$1.84 trillion in the first six months, the Customs data showed. The trade surplus in the period climbed 56.4 percent from a year earlier to US$68.9 billion.
Emerging markets continued to weigh more in China's trade, while traditional markets reported little growth. Trade with the European Union rose 0.7 percent in the first six months, while deals with Japan declined 0.2 percent, Customs data showed.
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