China trade data for July: Exports +19.3% y/y (expected +20.8%) & Imports +28.1% y/y (expected +33.0%)

In USD terms China’s Trade balance for July was $56.58 bln

vs. expected $51.54bn, prior was $51.5bn

Exports +19.3% y/y for a small miss on the median consensus estimate

expected +20.8% y/y, prior +32.2%

Imports +28.1% y/y, also a miss

expected +33.0% y/y, prior was +36.7%

China’s trade surplus with the United States ( Reuters calculation)

$35.4 bn in July ($32.58 bn in June)

As background to July’s data China’s economy has staged an impressive rebound since about mid-2020. July saw cases of the Delta variant of COVID-19 increasing, a trend that has continued into this month – many cities in the more industrial south and east have been impacted. Lockdowns and travel restrictions are a negative for business growth, and July was also impacted by floods and other bad weather.

Add in:

the ongoing semiconductor shortage
raw material (inputs to the production process) supply tightness, and higher raw material costs
logistics bottlenecks and high freight costs

We’ve had the round of most recent PMIs from China released earlier this month, those for manufacturing a pointing to a perhaps slower path ahead while those for services are better.

Manufacturing 50.3 in July