China’s exports hit a record high in July as shipments to Europe and the United States proved surprisingly buoyant, allaying concerns that debt problems abroad may hold back the world’s No. 2 economy. But analysts warned it was too soon to declare that Chinese exports can hold up in coming months as debt worries, sluggish consumer spending and now wildly volatile financial markets plague its two biggest customers. “Both imports and exports are likely to grow at a slower pace in coming months,” said Li Xunlei, an economist at Guotai Junan Securities in Shanghai. “The global financial market turbulence may lead to a contraction in external demand.”
July exports rose 20.4 per cent from a year ago, the strongest gain since April and surpassing economists’ median forecast for a 17.4 per cent rise, data on Wednesday showed. Imports were roughly in line with expectations, rising 22.9 per cent in July from a year earlier, the General Administration of Customs said. Economists had forecast growth of 22.3 per cent. “China’s trade sector is still facing great uncertainties,” said Nie Wen, an analyst at Hwabao Trust in Shanghai. “Developed countries are forced to take austerity measures, and emerging markets may tighten (policy) as well to tame inflation.” Indeed, just hours earlier, the U.S. Federal Reserve took the unprecedented step of promising to leave interest rates near zero for at least two more years, painting a gloomy picture for the world’s largest economy. Noting that monetary policy risks are shifting to supporting growth from fighting inflation, China has signaled it may pause its 10-month policy tightening campaign for now. Wednesday’s data suggested sluggishness in the U.S. and European economies has yet to put a big dent in Chinese export growth, as many investors had feared. Instead, robust U.S. and European shipments helped pushed the value of China’s monthly exports to a record high of $175.1 billion.
