In August, China’s export growth accelerated to 8.7% year-on-year in USD terms and 8.4% year-on-year in CNY terms, according to UOB Group economist Ho Woei Chen. This growth exceeded Bloomberg’s estimates of 6.6% and surpassed July’s figures of 7.0%. While this positive headline for exports is promising, there is caution due to weaker import numbers.
Although China reported stronger export growth in August, the outlook is clouded by flat import growth and signs of weakening external demand. In terms of volume, China’s demand for commodities has remained strong despite a slowing economic momentum. Imports of refined petroleum products, LPG, and soya beans saw noticeable increases in August, while imports of iron and copper showed moderation compared to the previous year, indicating weaker construction activity.
Despite concerns about weaker external demand, the low base effect is expected to continue supporting both export and import growth for the remainder of the year. UOB Group economist Ho Woei Chen anticipates China’s export growth in 2024 to be around 5.0%, following a decline of 4.6% in 2023. Import growth is also expected to improve, reaching 4.5% in 2024, compared to a decline of 5.5% in 2023.
The resilience of China’s commodity demand and the strong performance of certain imports in August suggest that the economy is still showing signs of growth. However, the ongoing trade tension and external demand uncertainties could pose challenges in the coming months. It will be crucial for China to carefully monitor these factors and implement appropriate measures to sustain its economic growth.
As the year progresses, it will be important for China to maintain a balance between stimulating domestic demand and managing external trade relationships. By focusing on boosting domestic consumption and investing in infrastructure and innovation, China can continue to drive economic growth and maintain its position as a key player in the global economy. With careful planning and strategic policies, China can navigate the challenges ahead and build a sustainable path for future growth.
