Chinese Exports Exceed Expectations and Imports Record Highest Annual Increase

Chinese exports in July recorded strong growth that surpassed analysts' expectations, while imports jumped to their highest level in a year, amid ongoing trade tensions with the United States ahead of the scheduled end of the customs truce on August 12.

Customs data released on Thursday showed that exports rose by 7.2% year-on-year in US dollars, exceeding the expectations of economists surveyed by "Reuters", who predicted growth of about 5.4%. Imports also recorded an increase of 4.1% compared to the same month last year, the highest rate since July 2024, according to data from (LSEG), following a slight growth of 1.1% recorded in June.

Despite economic challenges, China achieved a cumulative trade surplus of $683.5 billion by the end of July, an increase of 32% compared to the same period last year, supported by export growth of 6.1%, while imports declined by 2.7%.

For his part, Chiu Chang, head and chief economist at "Pinpoint Asset Management", confirmed that exports have "strongly" supported the Chinese economy so far this year, but he warned that "the momentum from accelerated shipments may soon fade".

This positive trade performance comes alongside an unexpected decline in Chinese industrial activity during July, as the official Purchasing Managers' Index (PMI) fell to 49.3 points, compared to 49.7 points in June, the lowest level in three months.

Trade negotiations between Washington and Beijing remain stalled, with little progress made to avoid the return of reciprocal tariffs after the current truce ends, increasing the challenges facing the Chinese economy in the coming months.