China exports at 18-month high, but slowing imports a concern

China’s economy has failed to fire over the past year amid a prolonged property sector downturn, and a survey last week showed exports in the doldrums and factory gate prices at their worst in 14 months, pointing to producers slashing prices to find buyers. China’s exports grew at their fastest pace in one-and-a-half years in August, suggesting manufacturers are rushing out orders ahead of tariffs expected from more and more trade partners, while imports disappointed amid weak domestic demand. The mixed trade data highlights the challenge facing Beijing as policymakers try to bolster overall growth without becoming too reliant on exports, especially given the tightening of consumers’ purse strings. Outbound shipments from the world’s second-largest economy grew 8.7% year-on-year in value last month, the quickest since March 2023, customs data showed Tuesday, beating a forecast of 6.5% increase in a Reuters poll of economists and a 7% rise in July.

But imports increased by just 0.5%, missing expectations for a 2% boost and down from the 7.2% growth a month prior. The strong export performance and trade surplus are favourable to economic growth in the third quarter and whole year. Economists have warned that Beijing risks undershooting its growth target, if it becomes too reliant on exports, amid a series of lacklustre data, raising pressure on policymakers for more stimulus to revive China’s economy. Outbound shipments to the EU rose 13.4% in August year-on-year, which represented the biggest increase out of Beijing’s major export markets, followed by an 8.8% lift in sales to the Southeast Asian economies. Chinese exports to the US rose by just an annual 4.9% last month but imports grew 12.2% over the same period, the most of any major import market.