China's exports rose 23.9% year-on-year in July, beating forecasts as chip and high-tech shipments surged, while the trade surplus narrowed to $112.5 billion. Growth partly reflected exporters rushing goods to the U.S. ahead of a new tariff, and China's widening trade surplus remains a persistent source of friction with its trading partners.
China's exports climbed 23.9% year-on-year in July, beating a Reuters-polled forecast for 22.2% growth. Imports rose 27.5% from a year earlier, just short of a 27.9% forecast, narrowing the trade surplus to $112.5 billion. Both figures cooled from June's 27% export surge and 36% import jump, yet demand for Chinese chips and high-tech goods kept the world's second-largest economy on track even as domestic consumption stayed subdued.
Chip and high-tech exports power growth
Chip exports surged 117% year-on-year in July alone. Semiconductor exports have nearly doubled in value since the start of the year.
Overall high-tech exports rose 40.7% from January through July, ActionForex reported, citing customs data. Mechanical and electrical products — including electric vehicles, lithium batteries and wind power equipment — made up more than 60% of China's total shipments in the same period, alongside fast-growing categories such as 3D printers and industrial robotics.
Tariffs fuel a front-loading rush to the U.S.
Exports to the U.S. accelerated to 17% year-on-year in July, up from about 14% in June. Some of that strength reflected exporters and importers rushing shipments ahead of steeper duties, said Xu Tianchen, a senior economist at the Economist Intelligence Unit.
Washington had imposed a new 12.5% tariff on Chinese products in late July, replacing a 10% temporary levy that had lapsed. Exports to the European Union grew 16% year-on-year. Imports from the bloc slipped 1%.
Uneven gains keep the imbalance in focus
The growth remained uneven: ceramic exports plunged 28.3%. Toy shipments fell 9.7%. Car exports climbed more than 50% in value, driven by Chinese automakers expanding aggressively abroad as domestic demand stayed soft.
China has leaned on trade to offset that soft domestic demand, with GDP growth cooling to 4.3% in the second quarter, its weakest pace since late 2022. Its trade surplus remains on track to top $1 trillion for a second straight year, keeping friction with trading partners alive. According to Reuters: "the growing trade imbalance can prompt more countries to impose protectionist measures," said Gary Ng, senior Asia-Pacific economist at Natixis.
Sources: CNBC, ActionForex, Investing.com
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