China exports, imports fall in June amid further signs of weakening demand in slowing economy
Exports fall 4.8 per cent in June from a year earlier, imports tumbled a worse-than-expected 8.4 per cent in June, after falling 0.4 per cent in May
China’s exports fell further last month amid continued weak overseas demand, with analysts warning of a gloomy global economic outlook made even gloomier by Britain’s vote to leave the European Union.
We expect external demand to remain weak during rising uncertainties with the Brexit vote and foresee downward pressure for exporters in the second half
Imports also proved disappointing, although Beijing’s increased sourcing of gold from Hong Kong led to a rise in the city’s overall exports to the mainland.
Exports fell 4.8 per cent last month in US dollar terms from the same period a year earlier, according to data released by the General Administration of Customs yesterday. This compared with a drop of 4.1 per cent in May.
Imports tumbled a worse-than-expected 8.4 per cent in June, after falling 0.4 per cent in May, the data showed. It was the sixth successive monthly drop in imports this year.
The trade surplus shrank to US$48.1 billion in June from May’s US$50 billion.
Bank of Communications senior Liu Tao said: “We expect external demand to remain weak during rising uncertainties with the Brexit vote and foresee downward pressure for exporters in the second half.”
However, China Merchants Bank said in a research note that things could look brighter in the second half due to a weaker yuan and improving demand from emerging markets.
In the first six months, exports fell 7.7 per cent compared with the same period last year, while imports fell 10.2 per cent over the same period.
General Administration of Customs spokesman Huang Songping tried to calm fears that surging imports from Hong Kong indicated rising capital outflow via false trade activities.
He said the rise in imports from Hong Kong was due to a growing appetite for gold in the special administrative region because of increased supplies and lower gold prices. China is shifting its gold imports to Hong Kong from traditional gold suppliers such as Switzerland, South Africa, and Australia.
Huang said that in yuan terms imports from Hong Kong grew 144 per cent year on year to 65 billion yuan (HK$78 billion) in the first half. But when gold was excluded, imports from Hong Kong shrank 2 per cent over the six months, in line with the general trade trend so far this year.
We don’t think surging imports from Hong Kong did translate into a capital exodus
He said that despite rapid growth of imports in gold, its value was not great and data showed China’s forex payment to Hong Kong fell in the first half.
“We don’t think surging imports from Hong Kong did translate into a capital exodus,” Huang said.
Elsewhere, the Ministry of Commerce said on Tuesday that China attracted US$15.2 billion in foreign direct investment last month – up 9.7 per cent on the same month in 2015. In the first half, FDI grew 5.1 per cent to US$69.4 billion.
China will announce its second quarter GDP data tomorrow, together with indicators on investment, industrial output and retail sales.
