China's Growth in Imports and Exports for June Beats Expectations

China’s imports are picking up as factories ramp up production.

Author: Belinda Zhou   

Customs data showed Tuesday that China's goods imports returned to growth in June for the first time after the coronavirus-fueled nosedive while the exports continued to soar since April. 

China's imports rose to $167.2 billion in June, up 2.7% year-over-year in dollar terms or 6.2% in RMB terms. June exports followed the momentum to add 0.5%, totaling $213.6 billion in dollar terms or 4.3% in RMB terms. This is after the nation reported a two-digit drop of 16.7% in imports 3.3% in exports for May.

A Reuters' poll showed a potential decrease of 10% and 1.5%, respectively, on the basis of a median estimate of 32 economists. The world's second-largest economy reported a two-digit drop of 16.7% in imports the previous month and a decline of 3.3% in May exports.

"Chinese private enterprises have played a more prominent role in the steady growth of foreign trade, accounting for 45% of the country's total international trade value, up 3.5% in the portion from the previous year, " Kuiwen Li, a customs spokesman at a news conference on Tuesday.

The total import and export of private enterprises reached 6.42 trillion yuan ($917 billion) in the first six months through June, up 4.9% year-over-year. 

The strong June figures help offset the slump in the first half-year; total international trade value fell 6.6% from the same period in 2019.

The demand for epidemic prevention supplies still has a significant impact on exports. June data showed that exports of materials related to epidemic prevention, such as fabrics, up 57% year-over-year, plastics, up 84% year-over-year, and doubled medical devices, continued to increase rapidly, and are still a strong driving force for current exports.

As per the Phase 1 trade deal commitments with the U.S., China increased its total imports from the U.S. by 11% year-over-year in June with 36% in agricultural imports.

"Affected by the epidemic and the tension between China and the U.S., China's purchases from the U.S have fallen below expectations, but both countries have stated that they are fulfilling their commitments," Jianguang Shen, an economist from JD.com, wrote in his analysis.

"It is expected that the procurement progress will be further accelerated in the second half of the year," Shen added.

The General Administration of Customs also reiterated that China still abides by its commitments during a press conference Tuesday.

Other Asian nations saw exports beginning pick up as the coronavirus outbreak fizzles out. South Korean's exports recovered from a year-over-year drop of 24% in May to a decline of 11% in June, while Vietnam's exports narrowed from a negative growth of 14% in May to a decrease of 3% in June. 

South Korea's exports to China rebounded 9.5% in June from the same period last year, but exports to the U.S. and the EU fell 8% and 17% year-over-year, respectively. 

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