China: Merchandise exports grow at a faster pace in August
Merchandise exports soared 25.6% on an annual basis in August, on the heels of July’s 19.3% upturn and markedly outpacing market expectations. Meanwhile, merchandise imports soared 33.1% over the same month last year in August (July: +28.1% yoy), also outpacing market expectations. The stronger readings for August could reflect the fact that July’s readings were held back by flooding, while exports were likely also boosted in August by the spread of the Delta variant globally aiding demand for protective equipment.
As a result, the merchandise trade balance improved from the previous month, recording a USD 58.3 billion surplus in August (July 2021: USD 56.6 billion surplus; August 2020: USD 57.1 billion surplus). Lastly, the trend improved, with the 12-month trailing merchandise trade balance recording a USD 607.6 billion surplus in August, compared to the USD 606.4 billion surplus in July.
Regarding the near-term outlook, import growth is likely to outpace export growth over the next few quarters, with imports benefiting from the swift containment of the latest domestic Covid-19 outbreak.
On exports, analysts at Nomura commented:
“We expect China’s export growth to trend down, as demand for personal protective equipment (PPE) and work-from-home (WFH) electronics products from developed economies declines and their consumption patterns shift back towards services from goods. We forecast a decline in headline year-on-year export growth (in USD terms) to around 8.0% in December.”