China's Exports Jump 23.9% in July, "Strong Export Momentum Expected in Q3"

Strong Performance in Semiconductors and High-Tech Products
Trade Surplus Narrows Compared to Previous Month
"US and EU Seek Additional Regulations Amid Trade Imbalance"

China's exports in July saw stronger-than-expected growth, bolstered by higher semiconductor prices and robust exports of high-tech products. This strength in Chinese exports is expected to continue into the third quarter of this year. However, experts also anticipate intensifying trade pressure from the United States and Europe.

Visitors are passing by the Unix AI booth set up at the World Artificial Intelligence (AI) Conference held in Shanghai, China, on July 17. Photo by Reuters Yonhap News

According to the South China Morning Post (SCMP) on August 7, citing China's General Administration of Customs, China's exports in July reached USD 397.85 billion (about KRW 564.9 trillion), up 23.9% compared to the same period last year. This surpassed the market forecast of 22.88%, compiled by financial information provider Wind. Imports during the same period increased by 27.5% to USD 285.35 billion (about KRW 405.1 trillion), also exceeding the market forecast of 26.67%. Consequently, the trade surplus narrowed to USD 112.5 billion, compared with USD 125.62 billion in June.

China's exports to the United States in July increased by 17.05% year-on-year. Exports to both ASEAN (Association of Southeast Asian Nations) and the European Union rose by 38.36% and 15.95%, respectively. The export momentum was attributed to the recovery of the global information technology (IT) sector and rising demand for eco-friendly products.

By product category, exports of high-tech products surged 52.67% year-on-year. Although semiconductor export volume increased only 1.76%, rising prices caused export value to skyrocket by 116.57%. Semiconductor import volume also climbed by 8.46%, but the value jumped 71.12%. Meanwhile, as the Chinese government tightened export controls on strategic minerals, rare earth export volumes dropped by 29.54%.

The SCMP noted that China’s persistent large trade surplus has led the US and EU to pursue additional regulations, citing concerns over China's industrial overcapacity. Last week, the Communist Party of China’s Politburo also called for "promoting more balanced trade development" during its meeting.

Zhiwei Zhang, chief economist at Pinpoint Asset Management, said, "Chinese export strength will likely continue in the third quarter," adding, "A large trade surplus will put upward pressure on the yuan." He also predicted, "Negotiations to address trade imbalances are expected to intensify, ahead of the US-China summit in September and the China-EU economic meeting in October."

Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered, forecast that "expanded investment in artificial intelligence (AI) and rising demand for eco-friendly energy will continue to bolster Chinese exports in the latter half of the year." He added, "Rising semiconductor prices and El Nino-driven food price increases will likely contribute to higher imports."

This content was produced with the assistance of AI translation services.