China: Export growth moderated in Jul – UOB Group

China’s exports rose for the fourth straight month in Jul but the pace unexpectedly slowed, UOB Group economist Ho Woei Chen notes.

Low base to support both the export and import growth

“China’s exports rose for the fourth straight month in Jul but the pace unexpectedly slowed while imports rebounded strongly. As a result, the trade surplus narrowed to US$84.65 bn from its record high of $99.05 bn in Jun.”

“The low base effect is likely to continue to support both the export and import growth in 3Q24. For exports, the key downside risk stems from a sharper slowdown in global demand, exacerbated by risk aversion in the financial markets. Imports had a slow start to the year but measures to increase domestic consumption and industrial modernization could help boost import demand in the second half.”

“Factoring in the YTD performance, we lower our forecasts for China’s export and import growth in 2024 to 5.0% (2023: -4.6%) and 4.5% (2023: -5.5%) from 7.0% and 6.0% previously.”