Statistics

Growth in China's exports, imports slows down in July

(Xinhua)
Updated: 2010-08-10 11:55

BEIJING - China's exports rose 38.1 percent year on year to $145.52 billion in July, but the growth rate was down from a 43.9-percent surge in June, the General Administration of Customs said Tuesday. [China's trade surplus falls 21.2% in Jan-July July trade numbers hit record high]

China's exports rose 38.1 percent year on year to$145.52 billion in July, but the growth rate was down from the 43.9-percent surge in June, the General Administration of Customs (GAC) said Tuesday.

Related readings:  July trade numbers hit record high  China's trade surplus falls 21.2% in Jan-July  China's foreign trade recovers rapidly in H1: NBS  China key for world?trade growth

Imports increased 22.7 percent from a year earlier to$116.79 billion. The pace of growth, slower than June's 34.1-percent increase, was the smallest since imports resumed growing in November 2009 after having fallen for a year.

Slower growth in imports of commodities such as steel, copper and plastic products was in line with the softening in fixed assets investment growth, said ANZ Bank analyst Zhang Hao.

It also indicated China's policies to optimize industrial structure and ease excessive capacity has paid off, Zhang added.

On a monthly basis, exports in July were up 5.9 percent from June, but July's imports edged down 0.4 percent from the previous month, the administration said.

China's growth in exports will continue to slow in line with the expected slowdown in economic growth in the United States and the European Union from the third quarter, said Wang Tao, economist with the UBS Securities.

Wang said growth in exports will continue to outpace that of imports for the rest of the year and she expects the annual trade surplus to hit$185 billion this year.

The country's foreign trade totaled$262.31 billion last month, up 30.8 percent from a year earlier.

The trade surplus for the first seven months totaled$83.93 billion, down 21.2 percent over the same period last year.

July's trade surplus widened to$28.7 billion, the highest level since February last year, sparking speculation that pressure on a stronger yuan will rise.

"The increase in the trade surplus is likely to add pressure to the exchange rate while the continued stronger-than-expected expansion in exports might help reduce some of the domestic concerns about a possible sharp weakening in external demand," Barclays Capital said in a report to clients.

"A possible pickup in capital inflows in the coming months in view of the global easing monetary conditions and excess liquidity searching for yield may also add to the appreciation pressure," it said.

The central parity rate of the yuan weakened to 6.7745 per US dollar Tuesday from Monday's 6.7685, the strongest level since China abandoned a decade-old peg to the US dollar in July 2005. The currency is allowed to float on the inter-bank market within a daily limit of 0.5 percent each way of the central parity rate.

The People's Bank of China, the central bank, announced on June 19 this year it would further reform the formation mechanism of the yuan exchange rate to improve its flexibility.

Liu Dongliang, financial analyst with China Merchants Bank, expects the exchange rate of the yuan to strengthen to 6.75 against the greenback by the end of the month.

According to the GAC, China's trade with the European Union, the country's largest trade partner, climbed 36.6 percent year on year in the January-July period to$263.16 billion.

Trade with the United States jumped 30.6 percent during the period while that with Japan expanded 34.9 percent in the first seven months compared with a year earlier.

Brazil overtook Russia to become China's 10th largest trade partner, with bilateral trade surging 54.6 percent to$32.51 billion from January to July.