Chinese July trade data tells story of how there are 2 economies in the world right now: transportation-based (cars, shoes, luggage, oil) slumping, and home-based (high-tech, phones, toys, food), booming.
Chinese exports unexpectedly rose in July, thanks to booms in demand for high-tech gear needed for workers staying at home, according to an analysis by Trade Data Monitor, the world’s premier source of export and import statistics.
As the world’s number one manufacturer and exporter of consumer and industrial goods, China is considered a bellwether for the global trading economy. How it does is a key measure of how long the world will take to rebound from the Covid-19 pandemic.
In July Chinese exports rose 7.2% year-on-year to $237.6 billion and imports declined 1.4% year-on-year to $175.3 billion, according to Geneva- and Charleston-based TDM. That boosted China’s trade surplus with the rest of the world, lifting it to $62.33 billion from $46.42 billion surplus in June. Economists had expected exports to fall and imports to increase. The flip was partly caused by a decline in commodity prices and an unexpected boom in demand for high-tech goods including mobile phones.
After half a year of the pandemic, some trends are emerging. The European Union and U.S., whose citizens were helped by generous stimulus packages, are doing better than the rest of the world. Chinese exports to the U.S., Europe, and ASEAN countries were all collectively higher in July 2020 than the same month a year ago. Exports to the U.S., for example, increased 12% to $43.7 billion, while imports increased 3% to $11.3 billion, widening the U.S.-China trade deficit. However, shipments to India, Africa and Latin America declined, suggesting that the global economic contraction is already hurting the world’s emerging economies.
China’s mighty strategic advantage during the pandemic is that its factories make everything people need to survive, communicate and work during a time of stay-at-home orders and remote work lives.
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