[News] China’s July Export Growth Slows, Posing Challenges to Annual GDP Target

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The General Administration of Customs of the People’s Republic of China released the import and export data for July on August 7. The total export value in July, measured in USD, was $300.5 billion, representing a 7.0% year-on-year growth. However, this figure is lower than June’s 8.6% growth and falls short of the market expectation of 9.7%. Meanwhile, the total import value reached $215.9 billion, marking a 7.2% year-on-year increase, significantly higher than June’s -2.3%.

As the world’s second-largest economy, China’s slowdown in export growth may reflect a deceleration in global economic growth. With labor markets and consumer spending in various countries continuing to show weakness, coupled with strained trade relations due to China’s previous high export volumes, it may be challenging for China’s export growth to maintain its current pace for the remainder of the year.

The increase in imports might slightly alleviate the issue of weak domestic demand. During China’s Politburo meeting held on July 30, it was mentioned that policy efforts would be made to strengthen countercyclical adjustments, promote large-scale updates of equipment and durable goods, and enhance the consumption capacity of low- and middle-income groups.

However, these policies lack detailed implementation strategies. Similar to the Third Plenary Session, phrases such as “New quality productive forces” and “high-quality development,”  have been brought up frequently, but specific measures to boost domestic demand were only briefly mentioned.

In summary, with the potential decline in export growth due to the global economic slowdown and the uncertainty surrounding domestic demand stimulus policies, China faces significant challenges in achieving its annual GDP growth target of 5%.

 

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(Photo Credit: General Administration of Customs of the People’s Republic of China)