China Exports Growth Tops Expectations; Imports Rebound

(RTTNews) - China's exports grew more than expected in June on de-escalating trade tension with the US and imports rebounded for the first time this year, signalling a positive contribution from net trade to economic growth in the second quarter, official data revealed Monday.

Exports increased 5.8 percent year-on-year in June, the General Administration of Customs reported. This was stronger than the 4.8 percent increase in May and economists' forecast of 5.0 percent.

Imports rebounded 1.1 percent from a year ago, following prior month's 3.4 percent decline. Imports were expected to grow 1.3 percent.

Consequently, the trade surplus rose to $114.7 billion from $103.2 billion in May. The surplus was forecast to remain broadly unchanged at $103.2 billion.

Due to de-escalation of tariff tensions in May, exports to the US declined at a slower pace in June. Exports to the US fell 16.1 percent but slower than the 34.5 percent drop seen in May.

Following the higher tariff policies of the US administration early this year, Chinese exporters diversified their shipments to other Asian economies and the EU. Recently, there was a surge in ASEAN imports from China suggesting that supply chains are deeply intertwined.

In the first half of the year, China's exports advanced 5.9 percent, while imports declined 3.9 percent. As a result, the trade surplus surged to $585.9 billion.

Last week, US President announced new tariffs on imports from most Asian economies with effect from August 1. Further, Trump said goods transshipped to evade higher tariff will be subject to that higher tariffs.

The US imposed a 20 percent duty on goods from Vietnam and a sharper 40 percent tariff on goods transshipped from China through Vietnam.

In May, Washington and Beijing reached an agreement to suspend a majority of tariffs for 90 days and also to roll back certain restrictive measures. The deadline for China to reach a trade deal ends on August 12.

China is scheduled to release its second quarter GDP data on July 15. Beijing aims to achieve around 5 percent economic growth this year.

ING economist Lynn Song said China benefited from a wave of trade frontloading in the first half of the year. Even a low single-digit annual growth for exports will translate to a smaller drag on 2025 growth than what the market feared at the start of the year, the economist noted.