Steady rise in foreign trade

The first seven months of the year see rapid growth in the private sector and a rising trend in exports to non-US markets.

China’s foreign trade rose steadily by 4.2 percent year on year to 17.41 trillion yuan (US$2.47 trillion) in the first seven months with rapid growth in the private sector.

Exports in the January-July period jumped 6.7 percent to 9.48 trillion yuan, while imports increased 1.3 percent from a year earlier to 7.93 trillion yuan, making the trade surplus surge 47.4 percent to 1.55 trillion yuan, data from the General Administration of Customs showed on Thursday. 

As for July, China posted total foreign trade reaching 2.74 trillion yuan, an increase of 5.7 percent, of which exports soared 10.3 percent to 1.53 trillion yuan while imports edged up 0.4 percent to 1.21 trillion yuan, leading to a expansion of 79 percent in the trade surplus.

In dollar terms, foreign trade in the first seven months dipped 1.8 percent to US$2.56 trillion, with exports up 0.6 percent and imports down 4.5 percent. Exports and imports in July fell 0.8 percent to US$298 billion, of which exports grew 3.3 percent while imports dropped 5.6 percent.

China Customs said general trade had grown steadily in the year to date, with its proportion in the country's overall foreign trade getting higher.

In the first seven months, China's general trade advanced 5.7 percent to total 10.4 trillion yuan, accounting for 59.8 percent in total imports and exports which is 0.8 percentage points higher than in the same period last year.

Processing trade fell 2.3 percent to 4.34 trillion yuan, accounting for 24.9 percent in the headline foreign trade figure to post a decline of 1.7 percentage points from a year earlier. Of this total, 2.76 trillion yuan was exported, down 0.8 percent, while imports fell 4.7 percent to 1.58 trillion yuan.

The European Union was the largest trading partner at 2.72 trillion yuan in January-July, up 10.8 percent to account for 15.6 percent of all foreign trade. Exports rose 12.6 percent to 1.64 trillion yuan, while 1.08 trillion yuan was imported from the EU, up 8.2 percent, putting the trade surplus with the EU up 22.2 percent to 559.65 billion yuan.

Trade with ASEAN totaled 2.35 trillion yuan, an increase of 11.3 percent, accounting for 13.5 percent of the total.

Trade with the United States contributed 12 percent of total imports and exports, with the value down 8.1 percent to 2.1 trillion yuan, of which exports fell 2.1 percent to 1.62 trillion yuan while imports slumped 24 percent to 473.93 billion yuan. As a result, China's trade surplus with the US expanded 11.1 percent to 1.15 trillion yuan.

China Customs also highlighted growth in foreign trade with countries along the Belt and Road, posting an increase of 10.2 percent to total 5.03 trillion yuan, accounting for 28.9 percent in China's total foreign trade, up 1.6 percentage points.

"Although the additional US tariffs on Chinese goods are perceived to be negative to China’s export outlook for the rest of 2019, the rising trend in China’s exports to non-US markets may act as a cushion," said Betty Wang, senior China economist at the Australia and New Zealand Banking Group.

"In addition, anecdotal evidence suggests that hitherto there has been no huge impact on electronic manufacturers’ orders and the additional cost incurred by the tariffs could be absorbed by large downstream companies which have relatively high profit margins," Wang added.

Also of note, private enterprises posted rapid growth in imports and exports. In the first seven months, they contributed a total of 7.31 trillion yuan to China's exports and imports, up 11.8 percent, accounting for 42 percent of the total foreign trade value which is 2.9 percent higher than the same period last year. 

Among them, exports totalled 4.82 trillion yuan, up 14.2 percent, accounting for 50.9 percent of the headline exports, while imports grew 7.4 percent to 2.49 trillion yuan to account for 31.4 percent of the overall imports.

Meanwhile, foreign-invested enterprises posted foreign trade down 1.2 percent to 7.01 trillion yuan, while imports and exports of state-owned enterprises edged up 0.8 percent to 3.03 trillion yuan.

Imports of crude oil and natural gas increased by 9.5 percent and 10.8 percent respectively in amount, while imports of soybeans dropped 11.2 percent in the first seven months.

Commodity imports for July have shown a strong recovery despite concerns of weaker demand amid the US-China trade conflict. Most commodities recorded a strong rebound from June volumes. However, the pick-up in year-on-year growth rates suggests underlying demand remains robust, according to Daniel Hynes, senior commodity strategist at ANZ Group.

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