While China’s officials battle to raise consumption in the second-largest economy in the world, the country’s exports increased in August while imports fell far short of expectations, according to figures.
China’s General Administration of Customs reports that overseas shipments increased 8.7 per cent year over year last month, increasing from 7.0 per cent rise in July.
The numbers will provide officials some much-needed encouragement, as they have worked this year to combat several obstacles that have impeded growth and made customers hesitant to make big purchases.
But August’s import growth was only 0.5 per cent, a sharp decline from the 7.2 per cent recorded in July and significantly less than the 2.5 per cent predicted by the Bloomberg survey.
The data comes a day after news that consumer inflation picked up last month to a six-month high but still came up short of expectations, leaving many worried the economy could slip back into deflation.
“China’s economy continues to show diverging trends with weak domestic demand and strong export competitiveness, both reflecting the domestic deflationary pressure,” Zhang Zhiwei, President and Chief Economist at Pinpoint Asset Management, said in a note.
“The question is how long exports can stay strong given the weakening US economy and the rising trade tension,” Zhang added.
China has charted an uneven economic trajectory since the abrupt cancelling of strict counter-pandemic measures in late 2022. Its rapid economic development in recent decades has been propelled in part by booming exports, supported by a colossal factory sector.
However, a closely watched report last week showed manufacturing activity shrunk last month at its fastest pace since February.
Leaders in Beijing are targeting 5 per cent expansion in 2024 but that is considered ambitious by many economists. Second-quarter growth stood at 4.7 per cent, missing expectations.