China's Aug export growth unexpectedly picks up speed, imports solidly up

Reuters

Published Sep 06, 2021 23:44

BEIJING (Reuters) - China's exports unexpectedly grew at a faster pace in August, as solid global demand offset some of the pressure on the world's second-biggest economy from a resurgence of domestic COVID-19 cases and supply bottlenecks.

China staged an impressive recovery from a coronavirus-battered slump, but economic momentum has weakened recently due to the Delta variant-driven COVID-19 outbreaks, high raw material prices, slowing exports, tighter measures to tame hot property prices and a campaign to reduce carbon emissions.

Shipments from the world's biggest exporter in August rose at a faster-than-expected rate of 25.6% from a year earlier, from a 19.3.% gain in July, pointing to some resilience in China's industrial sector.

Analysts polled by Reuters had forecast growth of 17.1%.

China's eastern coastal ports have suffered congestion as a terminal at the country's second biggest container port shut down for two weeks due to a COVID-19 case. That put further pressure on global supply chains already struggling with a shortage of container vessels and high raw material prices.

Recent data pointed to slowing demand. China's businesses came under increasing pressure https://www.reuters.com/world/china/chinas-factory-activity-expands-slower-pace-august-official-pmi-2021-08-31 in August as factory activity expanded at a slower pace while the services sector slumped into contraction. A global semiconductor shortage has added to the strains on exporters.

Imports increased 33.1% year-on-year in August, beating an expected 26.8% gain in the Reuters poll and compared with 28.1% growth in the previous month.

China posted a trade surplus of $58.34 billion in August, versus the poll's forecast for a $51.05 billion surplus and $56.58 billion in July.

Many analysts expect the central bank to deliver a further cut to the amount of cash banks must hold as reserves later this year to lift growth, on top of July's cut https://www.reuters.com/article/us-china-economy-rrr-cut-idUSKCN2EF0U4 which released around 1 trillion yuan ($6.47 trillion) in long-term liquidity into the economy.