China’s exports grew 18% to $333 billion dollars in July, up from 17.9% in June, per the Wall Street Journal.
On the other hand, imports for July grew 2.3% year-over-year to $232 billion dollars, much lower than the economists' projection of 3.8%.
What Happened: As the China economy opens back up from its COVID-19 lockdowns, the resurgence of its exports can be attributed to the easing of supply chain disruptions and backlogs from the “zero-Covid” policy.
In July, Beijing’s overall trade surplus reached an all-time high of $101.26 billion from $97.9 billion in June, as stated by ABC News.
The trade surplus represents an uneven recovery in China’s economy as there is a lack of domestic demand, with further evidence pointing to more internal struggles coming from China’s housing market.
China’s mortgage boycott has increased to 320 real estate projects from 30 in four weeks, spanning 100 different cities, according to Bloomberg.
Chinese Exports To Russia: After many Western companies pulled out of Russia, China began to fill the void as Russia bought $6.7 billion dollars of China exports, an annual increase of 20%, as mentioned by Bloomberg.
This brought China's exports with Russia back to levels seen before the war with Ukraine, though Russian oil shipments to China have started to lag.
Global Demand: The Wall Street Journal said retailers such as Target Corporation TGT, Walmart Inc WMT and Best Buy Co Inc BBY are saturated with unsold inventories due to diminished demand, which will cause these companies to reduce their orders and cut cost.
If China's export demand softens, it could create a new issue for the struggling economy, as its export growth brought the Chinese economy out of a sticky situation during the initial pandemic outbreak in 2020.
In July, the International Monetary Fund predicted that China’s economy would grow 3.3% this year, below the Communist Party’s target of 5.5% set in April.
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