China's exports are anticipated to have increased significantly in July, as manufacturers take advantage of a global upturn in merchandise trade, according to a Reuters poll. This robust growth is expected to maintain the momentum of exports, overshadowing concerns over tariffs.
Trade data to be released on Wednesday is projected to show a 9.7% year-on-year increase in exports by value, based on the median forecast of 30 economists surveyed. This marks an improvement from the 8.6% rise in June and would be the largest expansion since a 14.8% gain in March last year.
This fourth consecutive month of export growth offers a positive outlook for the world's second-largest economy, which is striving for momentum despite efforts to boost domestic demand following the COVID-19 pandemic.
Imports are also expected to have grown by 3.5% last month, reversing a surprise decline of 2.3% in June. This suggests that factory owners are purchasing more parts and materials to produce finished goods for export. Notably, South Korea, an indicator of China's tech imports, saw its exports to China soar by 14.9% to a 21-month high of $11.4 billion last month.
China's economy grew by 4.7% in the second quarter, a slower-than-expected pace due to a prolonged property downturn and job insecurity. However, analysts remain optimistic about the Chinese economy's momentum in the second half of the year, with support measures nudging the property sector towards stability.
More fiscal stimulus and sustained export strength are expected to bolster China's near-term growth, according to Capital Economics. While tariffs and the threat of additional duties pose challenges to China's trade, the $18.6 trillion economy's competitiveness across multiple sectors is likely to mitigate the impact of new trade restrictions.
Despite global tariff challenges, including the United States' planned tariff increases and the European Union's provisional duties on Chinese electric vehicles, China's manufacturing sector shows resilience. Although manufacturing activity dipped to a five-month low in July due to falling new orders and low prices, increased policy support is anticipated to drive a recovery in the coming months.
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