China exports beat forecasts in June after US tariff truce
BEIJING: China’s exports rose more than expected in June, official data showed on Monday, following a tentative agreement between Washington and Beijing to reduce swingeing tariffs on each other.
Figures from the General Administration of Customs indicated that exports climbed 5.8% year-on-year, exceeding the 5% forecast in a Bloomberg survey of economists.
Imports rose by 1.1%, surpassing the predicted 0.3% gain and marking the first growth recorded this year.
China’s exports reached record highs in 2024, providing a lifeline to its slowing economy amid mounting external pressures.
Efforts by Beijing to sustain growth have been hampered by a bruising trade war with the United States, driven by President Donald Trump’s sweeping tariffs. However, the two sides de-escalated tensions with a framework for a deal reached during talks in London last month.
Monday’s customs data showed Chinese exports to the United States surged by 32.4% in June, having declined the previous month, according to an AFP calculation based on official figures.
“Growth in export values rebounded somewhat last month, helped by the US-China trade truce,” said Zichun Huang, China economist at Capital Economics.
“But tariffs are likely to remain high and Chinese manufacturers face growing constraints on their ability to rapidly expand global market share by slashing prices,” Huang added.
“We therefore expect export growth to slow over the coming quarters, weighing on economic growth.”
Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said the figures indicated that Chinese firms were still “frontloading” exports to the United States — accelerating shipments in anticipation of further tariffs.
The strong export performance “helps to partly offset the weak domestic demand and likely keeps GDP growth around the government target of 5% in the second quarter,” Zhang said.
“But the outlook for the second half of the year is unclear, as the frontloading of exports to the United States will fade out sometime,” he added.
Customs official Wang Lingjun told a press conference on Monday that Beijing hoped “the US will continue to work together with China towards the same direction,” according to state broadcaster CCTV.
The tariff truce was “hard won,” Wang said.
“There is no way out through blackmail and coercion. Dialogue and cooperation are the right path,” he added.
Stuttering growth
Analysts expect China’s economy to have expanded by more than 5% in the second quarter, buoyed by strong export performance. Official figures are due to be released on Tuesday.
However, they also warn that Trump’s trade war could trigger a sharp slowdown in the final six months of the year.
Beijing is targeting overall growth of around 5% in 2025 — the same as last year, though many experts consider this goal ambitious.
First-quarter growth stood at 5.4%, exceeding forecasts and placing the economy on a positive trajectory.
Since the pandemic, Beijing has struggled to maintain momentum, grappling with a prolonged debt crisis in the property sector, persistently low consumption and high youth unemployment.
Data released last week showed consumer prices edged up in June, barely ending a four-month deflationary trend, while factory gate prices fell at their fastest rate in nearly two years.
Many economists argue that China must pivot towards a growth model driven more by domestic consumption than by traditional pillars such as infrastructure investment, manufacturing and exports.
In response, Beijing has introduced a series of measures since last year to stimulate spending, including a consumer goods trade-in subsidy scheme that briefly boosted retail activity.
By RSS/AFP
