China’s exports jumped 9.5 per cent in August in dollar terms compared with the same month last year — the highest increase of any month this year and above expectations of a 7.5 per cent rise.
The rise in exports underlined China’s dominant role in global trade during the coronavirus pandemic and its recovery from it.
Chinese exports have risen year on year for three straight months, raising hopes of a wider resurgence in international trade that has been hammered by the outbreak.
“This by itself is a good sign for global trade,” said Louis Kuijs, head of Asia economics at Oxford Economics, adding that the data had “again surprised on the upside”.
China’s exports had also beaten expectations to climb 7.2 per cent year on year in July after rising just 0.5 per cent in June when the metric returned to growth after a severe contraction.
While the data are closely watched for signs of global demand recovering from the pandemic, economists have over recent months pointed to specific coronavirus-related factors that have supported China, including big rises in exports of electrical equipment as well as medical products.
Trade also recovered at a time when other exporters have struggled. South Korea’s data, released last week, showed the country’s exports fell for the sixth consecutive month in August, though exports of computers and home appliances rose sharply.
Oxford Economics estimates that China’s global market share of world exports averaged 17.2 per cent in the second quarter based on data including other big economies. China’s share has reached its highest ever level this year on that basis. In 2019, the share averaged 13.9 per cent.
“It’s extremely unlikely that global trade expanded as fast as China’s exports did in August”, said Mr Kuijs. “China’s export data gives an inflated picture of what is happening with global demand.”
China’s trade surplus with the US rose to $34.2bn in August, its highest level since November 2018. China’s overall trade surplus was $58.93bn last month.
Imports came in below expectations, falling 2.1 per cent in August in dollar terms.
Ken Cheung Kin Tai, Asia foreign exchange strategist at Mizuho, noted that “the surprising decline in imports pointed to feeble demand in domestic consumption and production amid the recovery”.
China’s economic recovery has been powered by strong, state-supported industrial growth, but concerns have lingered over retail consumption that has contracted every month this year up to July.
The country returned to growth in the second quarter after new cases of coronavirus slowed to a trickle and lockdown measures were eased.