China Posts Record Trade Surplus

Posted by Eric Haun
Friday, August 08, 2014
Photo: CMA CGM

China's buoyant exports pushed its trade surplus to a record in July, fuelling optimism global demand will help counter pressure on the domestic economy from a weakening property sector.

While manufacturing appears to have picked up in the world's second-largest economy, unexpected weakness in the services sector this week has renewed concerns about the growth outlook. The weak housing market remains China's biggest risk, posing a drag on the broader economy and investor confidence.

Recovering global demand may not be enough to bolster a weak internal economy weighed by a cooling property sector and Beijing's anti-corruption drive, suggesting policy support will likely continue to keep economic growth on track, analysts say.

Exports in July jumped 14.5 percent from a year earlier - the fastest pace in 15 months, the General Administration of Customs said on Friday, doubling from 7.2 percent in June and roundly beating market expectations. Exports were stronger than expected even after pricing in inflated export data in early 2013, when firms falsified invoices to skirt capital curbs.

Some analysts attributed the export spurt to delayed shipments caused by recent volatility in the yuan which may not sustain. Meanwhile, imports fell 1.6 percent versus a rise of 5.5 percent in June, leaving the country with a record trade surplus of $47.3 billion for the month.

"The (export) data indicates very strong demand externally and less need for a weak currency," said Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong.

"However, imports contracted 1.6 percent year-on-year, indicating soft domestic demand and a downward pressure on growth. Policymakers are likely to do more to support the domestic economy."

A Reuters poll had predicted a 7.5 percent rise in exports, a 3 percent increase in imports and a trade surplus of $27 billion.

Financial markets firmed on the data with the Shanghai Composite Index rebounding. It rose 0.25 percent by midday from its intraday low, when it was down 0.32 percent.

Strong Exports, Weak Imports
After a weak start this year, China's exports have shown signs of improvement helped by stronger global growth as well as supportive domestic policies and the effects of a weaker yuan.

Exports to the United States, China's top export destination, rose 12.3 percent in June, quickening from a rise of 7.5 percent in June, while those to the European Union, the second-biggest market, grew 17 percent, compared with 13.1 percent in June.

Exports to ASEAN countries rose 11.9 percent in July, accelerating from 9.7 percent in June, the customs data showed.

Customs spokesman Zheng Yuesheng told state television that China exports are likely to stay strong in the coming months.

"The external demand is improving as a recovery in major developed countries underpins the global economy," he said.

Imports from China's largest source for resources, Australia, dropped 5.7 percent, partly due to softer commodity prices but the fall adds to questions over the health of domestic demand.

Some analysts attributed weak imports to the crackdown on commodity financing following the Qingdao port fraud probe.

Combined exports and imports grew 2 percent in the first seven months from a year earlier, trailing far behind the government's full-year target of 7.5 percent.

The record trade surplus and pressure from capital inflows were seen renewing pressure on the yuan. The currency is poised for its third consecutive day of gains as the central bank signaled it was comfortable with stronger levels as the economy was improving.

"With Chinese economic activity improving, we believe that there is scope for RMB to further appreciate, driven by conversion of onshore FX deposits and increased foreign portfolio inflows," analysts at ANZ said in a note.

That could create a fresh headache for China's central bank, which intervened to weaken the currency earlier this year when it punished speculators betting on one-way yuan appreciation.

Chinese leaders have pledged to maintain pro-growth policies to help achieve the annual growth target of 7.5 percent.

The government unveiled a burst of "targeted" policy stimulus since April, including cutting reserve requirements for some banks, hastening construction of railways and public housing and allowing local governments to loosen property curbs.

The Politburo, a top decision-making body of the ruling Communist Party, said last month that China must maintain a "certain speed" in its development over the long term to help resolve problems in the economy

The government is due to release inflation data on Saturday, and industrial output, retail sales and fixed-asset investment on Aug. 13. New loan and money supply data will be issued between Aug. 10-15.

(By Kevin Yao and Xiaoyi Shao; Reporting by China economics team; Editing by Jacqueline Wong)

Maritime Reporter August 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Ports

Maritime Reporter @ 75: The Daily Cartoon

Maritime Reporter & Engineering News was founded by John J. O'Malley (1905-1980) in 1939, and today ranks as the world's largest audited trade publication in the world serving the maritime industry,

MM&P Hopes to Pad Ranks with Brown Water Mariners

New York Harbor Tug Boat Captains and Crews, Staten Island Ferry Workers, Circle Line and Other Tourist Boat Crews Vote on Joining New Union Uniting with the International Organization of Masters,

Second Sailing Added to Cleveland-Europe Express

The Port of Cleveland and Amsterdam-based Spliethoff Group announced today their mutual intent to add a second monthly vessel to the Cleveland-Europe Express (CEE),

Finance

NRC Program Targets Vessel Operating Costs, Safety

Canada’s NRC creating solutions for the growing Canadian shipbuilding, military vessels, marine commercial transportation and offshore resource industries As

Senator Says 2015 Could Be Time for US Oil Export Bill

The top supporter in the U.S. Congress for reversing the 40-year ban on crude oil exports, Senator Lisa Murkowski from Alaska, said next year could be the time for a bill on lifting the restriction.

Global Ship Lease to Acquire Containership

Global Ship Lease, Inc. has  announced  that it has agreed to acquire a 8,063 TEU containership from a leading container liner company for a purchase price of $55 million.

News

Jet Edge Celebrates 30 Years in Waterjet Industry

Waterjet systems manufacturer Jet Edge, Inc. celebrated its 30th anniversary Sept. 3 with a special open house celebration. Jet Edge’s anniversary event included

TITAN Salvage Receives NAMEPA Award

The North American Marine Environment Protection Association (NAMEPA) announced earlier this month that Houston-based TITAN Salvage, a subsidiary of Crowley Maritime Corp.

Second Sailing Added to Cleveland-Europe Express

The Port of Cleveland and Amsterdam-based Spliethoff Group announced today their mutual intent to add a second monthly vessel to the Cleveland-Europe Express (CEE),

Logistics

Second Sailing Added to Cleveland-Europe Express

The Port of Cleveland and Amsterdam-based Spliethoff Group announced today their mutual intent to add a second monthly vessel to the Cleveland-Europe Express (CEE),

Finland Grants Support to Three Small LNG Terminals

The Finnish government granted 65.2 million euros (84.22 million US dollar) in subsidies to build three small liquefied natural gas (LNG) terminals to cut on use

LQT Delivers Accommodation Facility and Helideck in Gulf of Mexico

LQT Industries , a full-service provider of accommodation facilities, design-build construction services, and support services to the oil and gas industry, has

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Navigation Pipelines Port Authority Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1392 sec (7 req/sec)