China’s exports seen rising more quickly in June amid fresh tariff fears: Reuters poll
2024.07.10 02:02
By Joe Cash
BEIJING (Reuters) – China’s exports likely grew at the fastest pace in fifteen months in June, as manufacturers front-load shipments in anticipation of tariffs from a growing number of the country’s major export markets.
Trade data on Friday is expected to show exports grew 8.0% year-on-year by value, according to the median forecast of 31 economists in a Reuters poll, up from the 7.6% increase in May and the best pace since a 10.9% gain in March last year.
Imports likely grew 2.8% last month, faster than the 1.8% gain seen in May, suggesting factory owners are buying more parts to be turned into finished goods for export.
Stronger-than-expected exports have been one of the few bright spots for an economy that is otherwise still struggling for momentum despite officials’ efforts to stimulate domestic demand following the pandemic. A prolonged property slump and worries about jobs and wages are weighing heavily on consumer confidence.
The $18.6 trillion dollar economy is so overwhelmingly competitive across so many sectors, including steel, solar and consumer goods, that even new trade restrictions wouldn’t really slow the export juggernaut, analysts say.
Still, as the number of countries considering stepping up curbs on Chinese goods increases, so too does the pressure on its exports to prop up progress towards the government’s economic growth target for this year of around 5%.
Washington in May hiked tariffs on an array of Chinese imports, including a quadrupling of duties on Chinese electric vehicles to 100%, while Brussels last week confirmed it would also impose tariffs, but only up to 37.6%.
Exporters are also on edge heading into U.S. elections in November in case either major party tips fresh trade restrictions.
Turkey last month also announced it would impose a 40% additional tariff on Chinese-made EVs, while Canada said it was considering curbs.
Meanwhile, Indonesia plans to impose import duties of up to 200% on textile products, which China is its biggest supplier of, India is monitoring cheap Chinese steel, and talks with Saudi Arabia over a free trade agreement have reportedly stalled over dumping concerns.
A global cyclical upturn in the electronics sector should also help exporters in the world’s No.2 economy, which is investing heavily in expanding production of older chips, known as legacy chips, that can be found in everything from smartphones to fighter jets.
South Korean exports to China – a leading indicator of China’s tech imports – jumped 16.8% last month.
The European Commission has reportedly began canvassing the bloc’s semiconductor industry for its views on China’s expanded production of legacy chips, which could constrain the Asian giant’s strong export performance in electronics.
The median estimate in the poll predicted China’s trade surplus will come in at $85.0 billion, up from 82.62 billion in May.
