The Slowdown In China’s Exports In July Threatens Future Disruptions

The growth of China’s exports unexpectedly slowed in July after the outbreak of new infections from the Covid-19 virus, in addition to the suffering of imports from a similar recession, which highlights the decline of the industrial sector in the country during the second half of the year despite the easing of epidemic restrictions around the world and the recovery of the trade sector.

The largest exporting country in the world recorded an amazing economic recovery from the severe recession caused by the Corona virus crisis during the first months of last year, as it controlled and contained the pandemic through the rapid introduction of vaccines that helped raise confidence.

But the new infections last July with the highly contagious delta strain that spread in dozens of Chinese cities forced local authorities to quarantine affected areas, order millions of people to conduct tests to detect the virus and temporarily stop some work, including factories, in addition to the seasonal floods and bad weather during the past month, which affected the industrial sector in some regions, as well as in central China.

In July, China’s exports recorded a growth of 19.3% compared to last year, failing to reach the level of analysts’ expectations, which were 20.8%, knowing that its growth during June was 32.2%, as imports rose by 28.1% from a year ago, failing to meet expectations of 33% growth by Reuters analysts, and also down from the 36.7% rate seen during the previous month.

On the bright side, China posted a trade surplus of $56.58 billion in July, topping analyst estimates of $51.54 billion and surpassing June’s surplus of $51.53 billion.

It is clear that the world’s second largest economy is heading for an 8% expansion this year, but analysts see that demand that was pent-up during the Corona crisis has reached its peak and predict that growth rates will begin to moderate. Read more [China’s economic recovery slows, investors hope for better policies].

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