China's export engine slows but trade surplus with US jumps to highest in nearly 2 years

A Chinese worker at a port in Qingdao, eastern China's Shandong province, on July 13, 2017. China's export growth slowed as global demand for its products moderated, while imports remained robust as investment at home aided demand.
A Chinese worker at a port in Qingdao, eastern China's Shandong province, on July 13, 2017. China's export growth slowed as global demand for its products moderated, while imports remained robust as investment at home aided demand.PHOTO: AFP

BEIJING/HONG KONG (BLOOMBERG) - China's export growth slowed as global demand for the country's products moderated, while imports remained robust as investment at home aided demand.

Overseas shipments climbed 5.5 per cent in August from a year earlier, the customs administration said on Friday (Sept 8). Imports rose 13.3 per cent, leaving a trade surplus of US$42 billion (S$56 billion).

Exports to the US increased 8.4 per cent from a year earlier to US$39.2 billion. The trade surplus with the US jumped to US$26.2 billion, the highest in almost two years.

As geopolitical risk clouds the global economic outlook, demand for Chinese products softened slightly amid mixed performances in some developed economies. Domestic demand showed signs of remaining resilient, thanks to steady investment.

"Strong imports reflect the momentum of domestic demand. It seems that third-quarter gross domestic product will see an upside risk again," said Mr Raymond Yeung, chief economist for Greater China at Australia & New Zealand Banking Group in Hong Kong. "The strong yuan is favourable to China if they want to buy more from the rest of the world."

"The slowdown of export growth is unsurprising, given lower price inflation and slower global demand growth," said Mr Larry Hu, head of China economics at Macquarie Securities in Hong Kong. "These days, trade numbers aren't very relevant to the renminbi, which is under a self-strengthening trend between appreciation and capital inflows."