China Trade Rises as Economy Recovers 07/14 06:33
BEIJING (AP) -- China's trade improved in June in a fresh sign the world's
second-largest economy is recovering from the coronavirus pandemic. But its
exporters face threats including tension with Washington and a possible
downturn in U.S. and European demand.
Chinese imports rose 3% over a year earlier to $167.2 billion, rebounding
from May's 3.3% decline, customs data showed Tuesday. Exports edged up 0.4% to
$213.6 billion, an improvement over the previous month's 16.7% contraction.
Imports of U.S. goods surged 10.6% to $10.4 billion despite tariff hikes in
a fight with Washington over trade and technology. Exports to the United States
gained 1% to $39.8 billion.
China, where the pandemic began in December, was the first economy to start
the struggle to revive normal business activity in March after declaring the
virus under control. Manufacturing is recovering, but consumer spending is
weak. Forecasters say exports are likely to slump as demand for masks and other
medical supplies recedes and U.S. and European retailers cancel orders.
Leading indicators "suggest that exports will start to contract again before
long," Martin Rasmussen of Capital Economics said in a report.
Relations with the United States, China's biggest national export market,
have deteriorated to their lowest level in decades.
Disputes over Hong Kong, human rights and the South China Sea added to
strains that began with a tariff war launched by the Trump administration in
2018 over Beijing's technology ambitions and trade surplus.
The two sides have announced sanctions on some prominent Chinese and U.S.
political figures in a dispute over abuses in the northwestern region of
Xinjiang, though it is unclear whether those officials will be affected.
President Donald Trump said Friday that work on the second stage of a deal
aimed at ending the tariff war is a low priority because relations were
"severely damaged" by Beijing's handling of the pandemic.
The two sides signed a "phase one" agreement in January to postpone further
penalties but tariff increases already imposed stayed in place.
China's June imports were boosted by a 74% increase in purchases of U.S.
soybeans under a pledge by Beijing in that January agreement to narrow its
trade surplus with the United States by importing more food and other goods.
"China's imports from the U.S. will likely remain elevated in the second
half of this year," said Nomura economists in a report.
Imports of U.S.-made semiconductors accelerated to 18.6% growth over a year
earlier, which Citigroup economists suggested might have been motivated by
concern U.S. export sanctions imposed on Chinese tech giant Huawei Technologies
Ltd. will be fully enforced once a temporary postponement ends.
Imports "should continue to ramp-up" as the government spends more to
support economic recovery and consumer demand, Rasmussen said.
China's global trade surplus narrowed to $46.4 billion from May's $62.9
The Chinese economy shrank by 6.8% in the first quarter, its worst
performance since at least the mid-1960s. The ruling party skipped announcing
an annual economic growth target, but private sector forecasts range from low
single digits to a small contraction.
Some forecasters raised their outlook slightly after factory activity in May
improved more than expected.