bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Denise Tsang

Trade gap rises less than forecast amid higher costs, policy moves and global easing
Mainland  exports grew at a lower than anticipated 17.6 per cent last month, slowed by higher costs, government policies and a downturn in the United States economy.
Analysts said export growth would ease further in the second half of the year.
Overseas shipments tapered off to US$121.53 billion, while imports rose 31 per cent to US$100.18 billion from June last year.
That left the trade surplus of US$21.35 billion, a 20.6 per cent increase, lower than  expectations of a US$22.4 billion gap.
The trade surplus shrank 11.9 per cent to US$99 billion in the first half, a downward trend caused by  increasing raw material prices, higher labour costs,  soaring crude oil prices, an appreciating yuan and a global economic slowdown.
With Beijing achieving success in  cutting the politically sensitive trade surplus, analysts  expect the central government will restore previously cut value-added tax rebates on selective exports, slow the pace of yuan appreciation and boost domestic consumption to bail out struggling exporters.
'The growth in exports, imports and the surplus was weaker in the first half in the shadow of the US economic slowdown,' said JP Morgan economist Wang Qian. 'Going forward, the US problem will spread to Europe, Japan and emerging markets, which will further hit export growth.'
Poor external demand would drag down  the mainland's export growth to 16 per cent this year, 'an alarming rate' compared with the average 20 per cent year-on-year monthly gain so far this year, Ms Wang said.
Last month's 17.6 per cent growth in exports was markedly below May's 28.1 per cent,  the General Administration of Customs revealed yesterday.
The 31 per cent growth in imports, meanwhile, lagged behind the 40 per cent increase in May.
However, the US$21.35 billion trade surplus last month was slightly higher than May's US$20.2 billion,  partly because of the fewer Golden Week holidays.
A weaker appetite for Chinese-made products and a depreciating US dollar led to an only 8.9 per cent increase in shipments to the US of US$116.82 billion in the first half of the year.
However, the strength of the euro  boosted half-year exports 27 per cent higher to US$137.02 billion in the European Union.
The mainland's  biggest trading partner accounted for 20 per cent of the US$666.6 billion in total exports.
Pointing to what is likely to be a further drop in the trade surplus and headwinds in the country's manufacturing-based economy, Ms Wang said she would not be surprised to see Beijing relax some restrictions in its export policy.
A case in point is a government plan to restore value-added tax rebates on textiles and garments exports to 15 per cent from 11 per cent now to lower exporters' cost burden. Exporters  generally pay  a 17 per cent VAT.
The mainland   exported garments worth US$49.96 billion, a 3.4 per cent increase, and  toys valued at US$3.32 billion, a 1.7 per cent growth,  in the first half.
Sun Mingchun, a Lehman Brothers economist, said a smaller trade surplus, sluggish export growth and signs of easing inflation meant the pressure to step up  yuan  appreciation would fizzle out in the second half.
In the first half, the yuan gained 12 per cent against the US dollar.
Mr Sun expects that the  Chinese currency would climb to 6.70 against the US dollar by the end of this year from a fresh record of 6.8428 yesterday.



Mainland export growth slowing