China July Trade Surplus Larger than Expected


China's trade surplus soared to USD 45.05 billion in July 2019 from USD 27.49 billion in the same month a year earlier and above market consensus of USD 40 billion.

Exports rose 3.3 percent from a year earlier to USD 221.5 billion in July, defying market expectations of a 2 percent drop and following a 1.3 percent decline in June. This was the fastest yearly growth in overseas sales since March despite escalating trade tensions with the US, but the rebound may be short-lived, with Washington preparing to impose more tariffs on USD 300 billion of Chinese goods from September 1st. Sales of oil products surged 20 percent to 5.49 million tonnes, as refiners continued to move surplus products overseas. Rare earth exports, which include 17 chemical elements used in consumer electronics and military equipment, went up 15.8 percent to 5,243 tonnes last month, the highest since December 2018, despite worries over supply from China. Recently, China has raised the prospect of limiting rare earth exports to the US, but not yet publicly announced any restrictions. Meanwhile, aluminium exports fell 6.2 percent to 487,000 tonnes.

Among China's largest trade partners, exports rose to the EU (6.5 percent), ASEAN (15.6 percent), South Korea (9.2 percent), Taiwan (19.9 percent), and Australia (1.1 percent), but fell to the US (-6.5 percent) and Japan (-4.1 percent).

Imports declined 5.6 percent to USD 176.5 billion in July, less than an expected 8.3 percent fall and easing from a 7.3 percent fall in June. That was the third consecutive month of decrease in imports, suggesting domestic demand remained sluggish and could lead Beijing to add more stimulus. Purchases of unwrought copper were down 7.1 percent from a year earlier to 420,000 tonnes in July, but were up 29 percent from June and at the highest level since January. Meanwhile, imports of crude oil climbed 14 percent to 41.04 million tonnes while purchases of iron ore increased 1.2 percent to 91.02 million tonnes as supply grew from miners in Australia and Brazil. In addition, soybeans imports rose 8 percent to 8.64 million tonnes, the highest level in nearly a year, as importers increased their purchases of Brazilian beans on higher crush margins. Imports of copper concentrate, or partially processed copper ore, were up 12.4 percent to an all-time high of 2.07 million tonnes in July. Total natural gas imports were 7.89 million tonnes in July, up from 7.38 million tonnes a year earlier and the highest since January.

Imports dropped from the US (-19.1 percent), the EU (-3.3 percent), Japan (-13 percent), South Korea (-20.1 percent) and Taiwan (-6.8 percent), but were higher from Australia (18.7 percent) and ASEAN (0.4 percent).

China's trade surplus with the US narrowed to USD 27.97 billion in July from USD 29.92 billion in June. Considering the first seven months of the year, the country's trade surplus with the US was USD 168.5 billion.

In January-July, China's trade surplus surged to USD 225.67 billion from USD 162.75 billion in the corresponding period the prior year.

In yuan-denominated terms, China's trade surplus came in at CNY 310.26 billion in July, as exports jumped 10.3 percent and imports rose at much softer 0.4 percent.

China July Trade Surplus Larger than Expected


General Administration of Customs | Rida Husna | rida@tradingeconomics.com
8/8/2019 9:48:14 AM