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China’s exports speed up in July but outlook cloudy

As China struggles to recover from a Covid, so exports growth of China speed up in July, also offering an encouraging boost to the economy. But weakening global demand could start to drag on shipments in coming months.

China’s exports gain steam but outlook cloudy
Figure: Many analysts have expected exports to fade as the global economy looks increasingly likely to be heading into a serious slowdown, weighed down by soaring prices and rising interest rates.

Meanwhile, exports rose 18.0 percent in July from a year earlier, the fastest pace this year, compared with a 17.9 percent increase in June and beating analysts’ expectations for a 15.0 percent gain.

Outbound shipments have been one of the few bright spots for the Chinese economy in 2022, as widespread lockdowns hit businesses and consumers hard and the once mighty property market lurches from crisis to crisis.

Rergarding this, Zhiwei Zhang, chief economist at Pinpoint Asset Management said, “China’s export growth surprised again on the upside, and continues to help China’s economy in a difficult year as domestic demand remains sluggish.”

However, many analysts have expected exports to fade as the global economy looks increasingly likely to be heading into a serious slowdown, weighed down by soaring prices and rising interest rates.

According to a global factory survey, demand weakened in July, and with orders and output indexes falling to their weakest levels since the onset of the Covid-19 pandemic in early 2020.

Besides that, China’s official manufacturing survey indicated activity contracted last month, raising fears that the economy’s recovery from lockdowns in spring will be slower and bumpier than expected.

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