China’s Trade Rose in Yuan Terms in June Amid Worsening Virus By Bloomberg

  


© Bloomberg. Genuine bundles of Chinese one-hundred yuan banknotes are arranged for a photograph at the Counterfeit Notes Response Center of KEB Hana Bank in Seoul, South Korea, on Friday, July 13, 2017. Yuan is set to slide for fifth week, longest losing streak since July 2016, as escalating U.S.-China trade tensions weigh on sentiment. Photographer: SeongJoon Cho/Bloomberg

(Bloomberg) — China’s exports and imports rose in yuan terms in June, even as the pandemic continued to ravage the global economy.

  • Exports grew 4.3% in yuan terms in June from a year earlier, while imports rose 6.2%, the customs administration said Tuesday. Economists had forecast that exports would increase by 3.5% while imports would shrink by 4.7%. Values in dollars are due for release shortly.

Key Insights

  • With countries such as the U.S. still unable to control the outbreak, there’s no sign of when global demand for Chinese exports will recover sustainably to pre-virus levels.
  • The deterioration of relations with the U.S. adds to the uncertainty for trade, although China has been stepping up efforts to meet the terms of the trade deal.
  • Positive net exports will provide some support to Chinese gross domestic product growth in the second quarter, after the historic 6.8% collapse in the first three months. The reading for GDP will be released Thursday.
  • An increase in the trade balance “could be the major support for the second quarter’s GDP growth, but it could only help to a certain extent,” said Iris Pang, chief economist for greater China at ING Bank NV ahead of the data release.

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  • In the first half of the year, exports of textile products including face masks surged by 32.4%. Exports of medicines and pharmaceutical products and medical equipment increased by 23.6% and 46.4%, respectively.
  • Driven by the increase of people working from home, exports of laptops increased 9.1%.

©2020 Bloomberg L.P.

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