Chinese exports jump, but domestic demand is lagging

Now Reading:

Chinese exports jump, but domestic demand is lagging

Chinese exports jump, but domestic demand is lagging
Text size Aa Aa

There was mixed news for China’s government as it tries to balance economic growth in the country.

Exports were buoyant in July, jumping 14.5 percent from a year earlier, but imports fell.

Manufacturing appears to have picked up, linked to a rise in goods shipped to the United States – China’s top export destination – as well as to the European Union, its second-biggest market.

Exports to the US were up 12.3 percent in July, quickening from a rise of 7.5 percent in June. To the EU they grew 17 percent, compared with 13.1 percent in June.

Exports to ASEAN countries rose 11.9 percent in July, accelerating from 9.7 percent in June, the customs data showed.

Customs Administration spokesman Zheng Yuesheng said: “Driven by the global economic recovery led by major developed countries, the external market and demand has improved. It will help the growing momentum of bilateral trade between China and its trade partners in the second half of the year.”

Imports slip

The import trend was more worrying for Beijing’s plans to rebalance the economy by boosting domestic demand.

Imports contracted by 1.6 percent year-on-year in July, whereas they rose 5.5 percent in June.

In addition recent figures showed unexpected weakness in the services sector renewing concerns about growth which could prompt more government stimulus measures.

Chinese leaders have pledged to maintain pro-growth policies to help achieve the annual GDP growth target of 7.5 percent.

The government unveiled a burst of “targeted” policy stimulus since April, including cutting reserve requirements for some banks, hastening construction of railways and public housing and allowing local governments to loosen property curbs.

China’s cooling housing market remains a worry, as it is a drag on the broader economy and investor confidence.

Beijing’s anti-corruption drive is also believed to have reduced growth.

with Reuters