China's export sector delivered robust growth in July, providing much-need support for the world's second largest economy that is almost certain to miss its GDP target this year.
Exports measured in US dollars jumped 18% in July from a year ago, marking the fastest pace of growth this year, according to Chinese customs statistics released on Sunday. Analysts polled by Reuters had forecast a 15% increase. In June, exports increased 17.9%.
Imports, meanwhile, grew 2.3% from a year earlier, slightly missing expectations and suggesting domestic demand remains weak.
July's strong export performance sent China's trade surplus to a record $101 billion for the month, the first time it has surpassed the $100 billion threshold. By comparison, the trade surplus in July 2021 was just $56.6 billion.
"The monthly trade data shows that China's factories continue to march towards a robust comeback from the latest Omicron wave," said David Chao, global market strategist for Asia Pacific (ex-Japan) at Invesco.
"Despite a softening global demand backdrop, the export beat was largely driven by normalizing production activity in places like the Yangtze River Delta [region]," he said. The Yangtze River Delta, which comprises Shanghai and parts of Jiangsu and Zhejiang provinces, is a key foreign trade hub.