China’s June exports make ‘surprise’ surge, but questions linger over trade outlook

China’s exports beat expectations to grow by 32.2 per cent in June from a year earlier, up from a 27.9 per cent expansion in May

Chinese customs and most analysts have tipped softer growth in the second half of the year, despite strong figures last month

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Powered by healthy demand for Chinese electronics, as well as continued recovery of the global economy, China’s exports in June exceeded market predictions. Photo: SCMP

Published: 8:15pm, 13 Jul 2021Updated: 11:25pm, 13 Jul 2021

China’s exports defied congestion at a key port to grow an unexpected 32.2 per cent in June to US$281.42 billion compared to the same period last year, while the easing of a global semiconductor shortage helped bolster electronics exports, new trade data showed on Tuesday.

Exporters were able to redirect shipments from Yantian International Container Terminal – which is responsible for a tenth of China’s foreign container traffic – when it closed for three weeks due to a coronavirus outbreak among port workers, analysts said.

The port returned to normal operations on June 24, but exporters are still contending with global logistics disruptions, including container shortages and sky-high freight rates.

Powered by healthy demand for Chinese electronics, as well as continued recovery of the global economy, exports last month exceeded market predictions of between 22 to 23 per cent growth and beat the 27.9 per cent year on year growth recorded in May.

China’s role in global supply chains remains intact and strong demand for electronics should persist.

Tommy Wu

“It comes as a bit of a surprise that outbound shipments rose … it appears that other ports were able to pick up the slack, with enough spare capacity to prevent a supply-side contraction in exports,” Capital Economics senior China economist Julian Evans-Pritchard said in a note.

“This does not mean the port closure had no impact, however. It has clearly contributed to increased shipping congestion and higher freight rates. It may also have acted as a partial constraint on export volumes, which were 3 per cent below their January peak last month.”

Exports of hi-tech products, home appliances and auto parts all saw growth last month from a year earlier, although textiles contracted, pointing to a retreat in some pandemic-related demand, said Tommy Wu, lead economist at Oxford Economics.