China's export, import growth accelerate in June

China's export, import growth accelerate in June

China's export, import growth accelerate in June

China posted a trade surplus of $42.77 billion in June, slightly above analyst forecasts for a surplus of $42.44 billion and wider than May's $40.81 billion.

Analysts were expecting shipments for June from the largest exporter in the world to rise by 8.7% which would be in line with growth from May. The US and China are set to reconvene for trade talks next week and the Trump administration, itching to impose steel tariffs, has just appointed a renowned China hawk, Dennis Shea, as Deputy Trade Representative.

"Today's upbeat figures point to still strong foreign demand for Chinese goods, as well as fairly resilient domestic demand", said Julian Evans-Pritchard of Capital Economics in a report.

Citi analysts said that they expected Chinese coal imports to maintain the momentum seen in H1 2017 and end the year with double-digit growth.

Exports from China denominated in the yuan increased by 15% during the first six months of this year compared to the same time one year ago, while imports were up 25.7% during that same period.

Its demand for imports, particularly for industrial commodities used to feed a construction boom, has remained robust in recent months.

Analysts however say that a slowdown in the demand for materials overseas might already be affecting results.

China publishes its second quarter economic growth numbers on Monday.

"Machinery electronics and high-tech products continued to be the main drivers for exports", said Kelvin Lam, greater China economist at HSBC.

Chinese leaders are trying to encourage domestic consumption and reduce reliance on trade and investment. "But we are sceptical that the current pace of imports can be sustained for much longer given the increasing headwinds to China's economy from policy tightening".

That saw the trade surplus grow from $US40.81 billion to $US42.77 billion, marginally topping the $42.44 billion.

While US demand remains robust, concerns of possible trade frictions between the United States and China appear to be back on the radar.

It was also an improvement on the 8.7% level reported a month earlier.

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