China exports jump 18% in July amid pandemic

China's export industries put in a strong performance last month after spending the first half of the year hampered by shortages of raw materials and pandemic-related lockdowns at major ports.

In July, outbound shipments increased 18% from a year earlier, the fastest pace this year, officials showed on Sunday, beating analyst expectations for a 15% gain, though imports remained sluggish.

Analysts had been expecting exports to fade amid growing signs that Europe, the US, UK and Australia are heading for a recession, dampening the outlook for global consumption.

Foreign trade container shipping docking at eight major Chinese ports increased by 14.5% in July, faster than the 8.4% gain in June, according to data released by the domestic port association.

In July, throughput at Shanghai port, one of the worst hit by Covid-related lockdowns, reached a new record high.

Chinese leaders who came under pressure after a general economic slowdown, many blamed the weakening property market for the export data.

A boom in property development has resulted in a mountain of debt that has resulted in a wave of bankruptcies across the construction and related industries.

S&P Global rating agency said last month that property sales in China could fall by one-third this year due to people losing faith in the market and pressure on struggling developers to complete pre-sold apartments.

China wants to make sky-high property values more affordable and prevent corporate insolvencies, because of the central bank's efforts to make borrowing rules more affordable. In order to boost domestic business activity, local governments have expanded new infrastructure projects.

Many analysts remain sceptical about Beijing's ability to make a soft landing for the property sector that cushions the economy from the worst effects of a slide in prices, especially when exports are likely to slow towards the end of the year.

A global factory survey last week showed that demand fell to a weakened level in July, with orders and output indexes falling to their weakest levels since the onset of the epidemic in early 2020.

China s official manufacturing survey showed that activity contracted last month, indicating an imminent and broad slowdown in activity.

The surge in exports pushed China's trade surplus to a record $101.3 bn 839 m last month.

Despite the fact that exports played a part in boosting the figures, weaker imports were also a big factor.

Imports rose 2.3% from a year earlier, compared with June's 1% gain.

In the second half of the year, the import momentum will be picked up, as construction related equipment and commodities are supported in the wake of increased infrastructure spending, according to analysts.

According to a meeting last week of the country's top economic planners, the economy is in a critical period of stabilisation and recovery, and retail sales fell 0.7% from a year ago, as many consumers were confined at home because of strict anti-virus measures.

The National Development and Reform Commission said: We should take advantage of the time window of the peak season for construction in the third quarter, improve work efficiency and create jobs for local people nearby as much as possible. Beijing recently signalled it was prepared to miss the government growth target of 5.5% for 2022, which analysts said was increasingly unattainable after the economy narrowly avoided contracting in the second quarter.

In late July, the International Monetary Fund cut its growth forecast for China to 3.3% from 4.4% in April, citing Covid lockdowns and the worsening crisis in the country s property sector.