China's Imports Resume Growth but Tamer Exports Raise Outlook Concerns

• China's exports grew at their slowest pace in three months in July, missing expectations and adding to concerns about the outlook for the vast manufacturing sector, while a rush to boost chip supplies before expected U.S. tech curbs bumped up imports. Analysts say China's factories will likely face stiff pressure in the months ahead, hobbled by Western tariffs and demand woes, while volatility in financial markets and U.S. recession fears raise fresh challenges for policymakers trying to bolster a fragile economic recovery.
• Outbound shipments climbed 7.0% in July from the year earlier, and customs data on Wednesday showed a slower pace of growth than June's 8.6% rise and missing forecasts of a 9.7% increase. "Due to base effect, China's exports may keep a single-digit growth in the near future, but considering the slowing external demand and tariffs, the outbound shipments in the second half of 2024 will face bigger pressure," said Lynn Song, chief economist for Greater China at ING.
• Imports rose at a robust 7.2% rate, reversing a 2.3% decline in June and marking the strongest performance in three months. It also beat analysts' expectations of a 3.5% rise. The brighter imports figures were underpinned by Chinese firms' rush to purchase chips ahead of expectations of further United States curbs on chips exports to the Asian giant, said Xing Zhaopeng, senior China strategist at ANZ.
• "Looking ahead, the upward trade cycle may have ended. Both imports and exports are expected to slow down in the third quarter." The slowdown in export growth adds to concerns about the outlook for the sector, analysts say, with many countries growing increasingly uneasy about China's trade dominance.

(Source: Reuters)