China’s exports rose for the fifth month in a row, a sign of rising demand abroad, even as imports fell amid a slowdown in Chinese Business.
Exports rose 8.7 percent year-on-year to $308.65 billion in August, beating economists’ estimates of around 6.5 percent, according to data released by China’s customs administration on Tuesday. The August export figure was also higher than the 7 percent increase in July.
August’s reading is the strongest in 18 months, partly due to a low base in August 2023, when exports fell 8.8%.
By comparison, imports rose by only 0.5 percent compared to the previous year, falling short of economists’ estimates of around 2 percent.
The Chinese leadership has increased its investments in the manufacturing industry in order to stimulate an economy which stalled during the pandemic and is still growing more slowly than hoped.
“Export values rose by the most in 17 months year-on-year, and export volumes hit record highs. We expect exports to remain robust in the near term, supported by the decline in China’s real effective exchange rate,” said Zichun Huang of Capital Economics.
“Import volumes declined last month but are likely to recover in the coming months as strong external demand boosts imports for processing and re-export and increased government spending boosts demand for industrial raw materials,” Huang said.
The Association of Southeast Asian Nations remained China’s largest trading partner and exports to ASEAN countries, the USA and the European Union increased compared to the same period last year.
China’s trade surplus rose to $91.02 billion in August (up from $84.65 billion in July).
While demand for exports is rising, China is struggling to stimulate domestic demand.
The consumer price index rose 0.6% in August, falling short of forecasts, according to data released Monday. Officials attributed the higher CPI to a rise in food prices. due to bad weather.
But the core CPI, which excludes food and energy prices, rose by just 0.3 percent in August, the lowest rate in over three years.
In August, China’s manufacturing activity fell to a six-month low, according to an official survey of factory managers, with the purchasing managers’ index falling to 49.1, according to official data released last week. A reading below 50 indicates a decline in manufacturing activity.
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