China posted a record $99bn (£76.4bn) trade surplus last month amid signs of importers bringing forward orders to beat higher tariffs on goods from the world’s second biggest economy.
The latest official figures from Beijing showed exports growing at their fastest rate in 15 months, while the weakness of China’s domestic economy resulted in falling imports.
The size of China’s trade surplus was far bigger than the $85bn expected by the financial markets and comes at a time of heightened concern in developed countries about Chinese exports.
Higher US tariffs on Chinese-made electric vehicles and other hi-tech products come into force on 1 August, while higher EU import duties on Chinese electric vehicles came into force earlier this month.
Analysts said the disparity between booming exports and sluggish imports highlighted the reliance of China’s economy on access to the west’s affluent consumers and would put pressure on Beijing to do more to stimulate domestic demand.
“This reflects the economic condition in China, with weak domestic demand and strong production capacity relying on exports,” said Zhiwei Zhang, the chief economist at Pinpoint Asset Management.
“The sustainability of strong exports is a major risk for China’s economy in the second half of the year. The economy in the US is weakening. Trade conflicts are getting worse.”
Exports grew by 8.6% year on year in June to $308bn (£238bn) and over the first half of 2024 China’s exports totalled $1.7tn, up by 3.6% year on year.
Auto exports rose by 18.9% in terms of value in the first half of 2024 and by 25.3% in volume amid lower export prices.
Lynn Song, the chief China economist at ING Bank, said there was likely to be a front-loading effect before auto tariffs from the EU and US came into effect, “but tariffs could lead to a slowdown in auto exports towards the end of the year”.
Household electronics sales climbed by 14.8% in value terms but showed even faster volume growth of 24.9%.
Semiconductor exports grew by 21.6% year on year in terms of value, and by 9.5% in terms of volume. “Strong semiconductor export growth shows that China’s self-sufficiency push in tech and its pivot towards hi-tech manufacturing is starting to pay some dividends,” Song said.
Kelvin Lam, a China economist at Pantheon Macro, said there had been a pickup in Chinese exports to the US, the UK and Germany last month. “Export growth of hi-tech products, mechanical and electrical items, cars, and ships is outperforming those low value-added products that China thrived on in the 1990s.”
