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Trade surplus rebounds

By Xin Zhiming (China Daily)
Updated: 2008-08-12 14:51

China's trade surplus rebounded to $25.3 billion in July from $21.4 billion in June, but analysts said the country's trade sector still faces uncertainties as the global economy is showing signs of further slowdown.

The country's export growth also picked up in July, up 26.9 percent from a year earlier to reach $136.7 billion, according to Customs statistics. In June, China's export growth slumped from 28.1 percent in May to 17.6 percent year-on-year, triggering widespread concern over the weakening trade sector and its likely impact on the economy.

In July, imports amounted to $111.4 billion, up 33.7 percent year-on-year. The trade volume, therefore, totaled $248.1 billion in the month, up 29.8 percent year-on-year.

China's imports have grown faster than exports since October, apart from March, which is in line with the policy of encouraging imports to rebalance trade. As a result, its trade surplus in the January-July period was $123.7 billion, down 9.6 percent year-on-year.

The rebound in trade growth in July is attributed to the continuing robust growth in exports despite the gloomy global economic prospects, analysts said.

"China's exports looked particularly impressive when taking into account a high base, as foreign trade was robust in the same month last year," said Sherman Chan, economist with Moody's Economy.com based in Sydney, Australia.

"The strong July trade data suggest China's trade prospects are not as dismal as indicated by the disappointing June figures."

A major factor that supports China's exports is that it specializes in manufacturing low-end items, many of which are considered necessities, meaning that demand will stay relatively solid despite unfavorable economic conditions, Chan said.

"Though we expect a continued deterioration as the year progresses, as US and European consumers stay at home, the resilience of demand for China's exports is still remarkable," said Stephen Green, head of research at the Standard Chartered Bank (China).

The real import growth was also strong, suggesting domestic demand remains sound, Green said.

China's trade outlook, however, remains uncertain because external demand is clearly weakening as the US and Europe are facing a significant slowdown, said Chan.