By Gina Lee
Investing.com – China reported that July’s exports rose at their fastest pace in seven months, but imports declined in the same month, leaving investors with a mixed picture of the Chinese economy’s recovery from COVID-19.
Customs data showed that exports increased 7.2% year-on-year, against June’s growth of 0.5% and predictions of a 0.2% slide prepared by Investing.com. Meanwhile, imports decreased 1.4% year-on-year, compared to June’s 2.7% and missed expectations of a 1% increase.
The country’s trade balance for July increased to $62.33 billion, compared to June’s $46.42 billion and exceeding the forecasted $42 billion.
“The data is in line with our forecast for exports to recover more decisively in H2 alongside the global economy,” Louis Kuijs, head of Asia economics research at Oxford Economics, said in a note after the data release.
“However, the road ahead may be bumpy as new export orders remain weak and the recovery path will be uneven across economies,” he warned.
Although the economy is slowly recovering after seeing a record contraction during the first quarter, the never-ceasing number of COVID-19 cases globally has impacted demand. The government is also dealing with record job losses and fresh outbreaks within the country.
But exports of medical supplies and demand for electronics, contributed to the meteoric growth in exports. July also saw robust imports of iron ore and copper, along with a jump in crude oil imports.
Meanwhile, tense relations between China and the U.S. contributed to the widened trade surplus in June. The two countries are set to review the implementation of their phase one trade deal on August 15.