Trade data exceeds expectations but demand still requires a boost

The total value of China's trade in goods was 28.58 trillion yuan ($4.01 trillion) in the first eight months of this year, up 6 percent year-on-year, of which exports reached 16.45 trillion yuan, up by 6.9 percent, and imports 12.13 trillion yuan, up by 4.7 percent, with a trade surplus of 4.32 trillion yuan, up 13.6 percent, data released by the General Administration of Customs show.

In August, the import and export volume was 3.75 trillion yuan, of which exports accounted for 2.2 trillion yuan, up 2.9 percent from the preceding month and 8.4 percent from the year before. Imports totaled 1.56 trillion yuan, up 1 percent month-on-month and unchanged from the year before, with a trade surplus of 649.34 billion yuan.

The 8.4 percent export growth in August exceeded market expectations, mainly due to the expansion of global demand. As China's foreign trade structure continues to optimize, its trade with emerging markets such as the members of the Association of Southeast Asian Nations, the countries involved in the Belt and Road Initiative, and Latin American countries remains extremely vibrant. In addition, due to unstable policy prospects in Europe and the United States, geopolitical conflicts driving up shipping costs, and traditional consumption seasons, it is likely that some foreign retail traders have chosen to stock up, expanding China's foreign trade demands.

Overall, that China's exports in August were not only above the trend, but also higher than both global and domestic GDP growth demonstrates its foreign trade resilience. An optimizing export structure and rising quality of foreign trade constitute the main features of the high-quality development of China's foreign trade. China's exports have become more diversified, with high-tech and equipment exports represented by mechanical and electrical products performing well. At the same time, the export proportion from private enterprises has steadily increased.

From a trend perspective, China's exports are expected to see moderate expansion. Despite facing weak global demand recovery, weakening base effect, and trade protection and geopolitical conflicts, the global economy is still expected to expand. China should continue to optimize its structure of foreign trade, intensify policy measures to ease foreign trade difficulties, and foreign trade enterprises should also take the initiative to deal with various changes.

Overall, China's well-performing exports and foreign trade surplus will provide a solid foundation for its economic growth in the third quarter and the whole year. However, considering its foreign trade still faces headwinds, China still needs to make greater efforts to promote the recovery of effective demand at the macro policy level, and increase support for foreign trade enterprises.