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Published: Sun, July 16, 2017
Global Media | By Abel Hampton

China Trade in June Beats Expectations

China Trade in June Beats Expectations

In US dollar terms, the country's trade balance increased from $40.81bn for May to $42.8bn in June, as did the bi-lateral shortfall in trade with America.

Unexpectedly strong export demand could help to support Chinese economic growth that is forecast to weaken this year as Beijing tightens bank lending controls to reduce the risks of rising debt. The US and China are set to reconvene for trade talks next week and the Trump administration, itching to impose steel tariffs, has just appointed a renowned China hawk, Dennis Shea, as Deputy Trade Representative.

Exports rose 11.3 per cent from a year earlier, as imports expanded 17.2 per cent, both beating analysts' expectations, official data showed.

Citi analysts said that they expected Chinese coal imports to maintain the momentum seen in H1 2017 and end the year with double-digit growth.

China has imported less refined copper this year amid tough restrictions on dollar-denominated credit, and as buyers turned instead to cheaper scrap metal after a recovery in copper prices prompted a flood of scrap into the market earlier this year.

Its demand for imports, particularly for industrial commodities used to feed a construction boom, has remained robust in recent months.

But analysts say a slowdown in demand for materials from overseas may already be taking place.

"Machinery electronics and high-tech products continued to be the main drivers for exports", said Kelvin Lam, greater China economist at HSBC.

"The better-than-expected export growth indicates a resilient trade outlook", said Betty Wang, senior China economist at Australia & New Zealand Banking Group Ltd in Hong Kong. "The cooling property market leads to slower domestic investment growth, which may weigh on import growth as well".

Labour-intensive products also staged a rebound, with the rate of growth snapping back from 4% for May to 6.2% in June. The trade surplus widened to 294.3 billion yuan ($43.4 billion) in June from 281.56 billion yuan in May.

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