Trade recovers ground in June, but performance falling short of target
Print Edition
CHINA’S trade performance in June beat market expectations, but the overall situation in the first six months of the year was still a cause for concern as it lagged behind the target for the full year, official figures showed yesterday.
Exports rose 2.1 percent from a year earlier to 1.17 trillion (US$188.7 billion) last month, reversing the drop of 2.8 percent in May, according to the General Administration of Customs.
Imports fell 6.7 percent to 890.6 billion yuan but improved on the contraction of 18.1 percent a month earlier.
With imports losing less than expected, the monthly trade surplus narrowed to 284.2 billion yuan in June, down from May’s 366.8 billion yuan.
Liu Ligang, an economist at Australia & New Zealand Banking Group, said China’s trade in June had recovered some ground from the soft performance in previous months.
“It is better than market expectation,” Liu said. “Especially the slower contraction of imports. It may be an early sign of an improvement in domestic demand, as price effects continued to have a large impact due to the much lower commodity prices compared with a year ago.”
However, figures for the first six months of the year were still a cause for concern.
Foreign trade decreased 6.9 percent to 11.53 trillion yuan in the first half, trailing the official target of an increase of around 6 percent for the year.
Exports expanded 0.9 percent in the period to 6.57 trillion yuan, while imports lost 15.5 percent to 4.96 trillion yuan, making the trade surplus 1.5 times that of a year earlier at 1.61 trillion yuan.
Huang Songping, a customs spokesman, said the disappointing data indicated very weak demand at both home and abroad, while Liu said it suggested that when China’s second-quarter GDP is announced tomorrow it will underperform, possibly falling to 6.8 percent, down from the first quarter’s 7 percent.
Chinese authorities have launched a set of supportive fiscal and monetary policies to bolster the stumbling economy, including an interest rate cut last month, the fourth in seven months. But economic performance remains weak.
The official Purchasing Managers’ Index, a gauge of operating conditions in manufacturing, was flat at 50.2 in June, indicating marginal growth.
But Liu said he remained optimistic about trade.
“In our view, both consumption and investment are bound to pick up in the second and third quarters on faster implementation of fiscal policy and much eased monetary policy,” he said. “Furthermore, the Ministry of Finance has reduced tariffs on various consumer goods. Thus, we may see a modest pick-up in Chinese imports soon.”
China’s bilateral trade with the European Union, its biggest trading partner, fell by 6.8 percent during the January to June period, while that with the United States, the second largest, rose 4 percent. Trade with Russia plummeted by 30 percent and that with South Africa was 28 percent down.
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