China's July Trade Data Shows That Demand Everywhere Is Collapsing

The latest trade data from China for July suggest that both external and Chinese domestic demands have weakened more than market expected.

Exports growth has slowed from +11.3% yoy in June to a mere +1.0% yoy in July, way below market estimate of +8.0%, while imports growth has slowed from +6.3% yoy in June to +4.7% yoy in July, also below market estimate of +7.0% yoy.

On a month-on-month and seasonally adjusted basis, the picture looks even worse.  Export growth has slowed from +4.3% in June to –4.2%, while import growth has slowed further from –0.6% to –5.8%.

As export has slowed more than imports, the resulting trade surplus shrank to US$25.147 billion, way below consensus estimate of US$32.2 billion, and down from US$31.710 billion in June.

export import growth china

Photo: Also Sprach Analyst

Source: General Administration of Customs

Breaking down the numbers by region, exports growth to Europe has fallen off the cliff.


china exports growth

Photo: Also Sprach Analyst

Source: General Administration of Customs

This is a very weak set of numbers.  Exports growth was dragged down primarily by Europe, reflecting the fact that Europe is more or less in a deep recession already, although this was still somewhat worse than what the market has expected.  Imports growth was also weaker than expected, reflecting the weak domestic demand which we have come quite used to it by now (still, this was worse than expected).  These figures add to the evidence against the consensus view that China economic growth has bottomed in the second quarter. 

This article originally appeared here: China’s trade data for July point to very weak external and domestic demands
Also sprach Analyst – World & China Economy, Global Finance, Real Estate

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