Imports expanded 13.3% in August from a year earlier, more robust than the 11.0% gain in July or the 10.0% gain expected in the poll.
Figures released by the General Administration of Customs (GAC) show that Chinese imports in August increased by 14.4 percent year-on-year, while export trade growth slowed to 6.9 percent – much lower than the 11.2 percent recorded in July.
Coming about a month before an important Communist Party conference in October, the figures present mixed news for China’s leaders who are trying to recalibrate the country’s growth model from one driven by exports and state investment to one based on domestic consumption.
But the Chinese currency has gained more than 6.5 percent against the dollar so far this year, erasing all its 2016 losses, thanks largely to the USA currency´s sharp reversal and Beijing´s steady tightening of forex controls.
The Chinese economy saw better-than-expected growth in the first two quarters of the year thanks to debt-fueled investment in infrastructure and real estate although warnings of a potential financial crisis have spurred Beijing to clamp down.
Meanwhile, the value of imports climbed 14.4% year-over-year. “The strength in the yuan is unlikely to change our optimistic view on China’s near-term export outlook”, ANZ senior China economist Betty Wang said in a note, arguing that China has a strong position in global supply chains.
Shipments to the U.S., China’s biggest export market, held steady at 8.45% in August, according to the customs data.
“China will need to demonstrate that its lack of intervention to resist appreciation over the last three years represents a durable policy shift by letting the (yuan) rise with market forces once appreciation pressures resume”, the Treasury said. Exports to Southeast Asian countries accelerated to 6%, while shipments to the European Union dropped to 5.2% last month, official data showed.
Foreign exchange analysts polled by Reuters expect the high-flying yuan to give back much of its gains over the next year, if the dollar gets a lift from any further USA interest rate hikes. It means loss for us. “There’s nothing we can do about it”, Mr. Chen said.