China Trade Balance July 2020


China: Export growth accelerates on July due to strong global demand for medical supplies

August 7, 2020

In July, exports expanded 7.2% over the same month in the previous year, following June’s 0.5% rise. Moreover, the print contrasted the 0.7% drop that market analysts had expected.

Meanwhile, imports fell 1.4% in annual terms in July. The print contrasted both the 2.7% rise in June and the 0.8% increase that market analysts had projected.

As a result of the stronger expansion in exports, the trade surplus jumped from USD 44.0 billion in July 2019 to USD 62.3 billion in July 2020 (June 2020: USD 46.4 billion surplus). The 12-month moving sum of the trade surplus rose from USD 412 billion in June to USD 431 billion in July.

July’s strong reading in exports reflected buoying demand for medical supplies across the globe. That said, Ting Lu, Jing Wang and Lisheng Wang, economists at Nomura, add three other factors:

“China is the first major industrial economy with COVID-19-related disruptions largely behind it. […] Third, China further strengthened its role as the world’s factory since March, when manufacturing in other major industrial economies was severely hit by the pandemic. Fourth, unprecedented fiscal stimulus and money printing in other major economies (especially the US) bolstered their residents’ purchasing power even as their countries were in lockdowns.”

Our panelists forecast that exports will contract 10.6% in 2020 and imports will drop 8.0%, bringing the trade surplus to USD 323 billion. In 2021, FocusEconomics panelists expect exports will expand 7.1%, while imports will rise 7.4%, leaving the trade surplus at USD 338 billion.

Author: Ricard Torné, Head of Data Analysis

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China Trade Balance Chart

China Trade12m July 20 20 0

Note: 12-month sum of trade balance in USD billion and annual variation of the 12-month sum of exports and imports in %.
Source: General Administration of Customs of the People’s Republic of China and FocusEconomics calculations.

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