China's exports likely grew 22.2% year-on-year in July, cooling from June's 27% surge, a Reuters poll of 35 economists shows. Imports are forecast to soften to a 27.9% rise, and the trade surplus is seen narrowing to $107 billion. Official customs data due Friday will show whether AI-linked demand and tariff frontloading kept growth robust even as factory activity contracted.
China's export growth likely cooled in July but stayed robust, powered by global demand for AI-related goods and a rush of shipments ahead of expected higher U.S. tariffs, a Reuters poll showed ahead of Friday's official trade figures. The data will offer an early read on the health of the world's second-largest economy after growth lost momentum in the second quarter.
Exports are expected to have expanded 22.2% year-on-year in July in U.S. dollar terms, slowing from the 27% surge in June, according to the poll of 35 economists. Imports are forecast to have risen 27.9%, softening from a 36% jump the previous month.
Trade surplus narrows as tariff tensions persist
The trade surplus is expected to come in at $107 billion in July, down from $125.62 billion in June. China's trade surplus, which topped $1 trillion last year, has stoked concern among Western trading partners and heightened tensions over the imbalance. Any escalation in those disputes risks new tariffs or restrictions that could test the durability of China's export-led momentum.
On July 24, the U.S. imposed a new 12.5% tariff on Chinese imports after a temporary 10% levy expired, part of a broader tariff campaign targeting partners Washington says have failed to curb forced labour. A separate U.S. investigation into trading partners' excess capacity will likely result in additional tariffs.
AI demand and frontloading offset domestic strain
China's exporters have drawn a tailwind this year from the global AI boom, helping shield the economy from geopolitical shocks and keep growth on track despite persistent domestic fragility. Besides the AI investment boom, frontloading of shipments by Chinese and U.S. businesses ahead of expected tariff hikes likely also boosted exports.
Analysts say disruptions from extreme weather, such as typhoons, likely weakened port throughput and shipping in July, slowing both exports and imports.
Factory activity contracts as Politburo signals support
Official data released in late July showed China's factory activity, along with services and construction activity, all contracted in July as demand slipped, while separate private surveys pointed to slower growth across the broader economy.
The Politburo, China's top decision-making body, pledged accelerating fiscal spending and timely adjustments to monetary policy tools at a late-July meeting. Leaders stopped short, however, of announcing consumer-focused stimulus or the broader structural changes long sought by trading partners and economists.
Source: Investing.com
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