China’s exports grew less than expected in June, offering no conclusive evidence yet on whether the economy can stabilise without additional government stimulus measures.
Exports rose 7.2 per cent in June from a year earlier, after May’s 7.0 per cent rise, while imports grew 5.5 per cent, versus a drop of 1.6 per cent in May, customs data showed on Thursday.
That left China with a trade surplus of $31.6-billion, compared with May’s surplus of $35.9-billion.
Economists polled by Reuters had expected a 10.6 per cent rise in exports, a 5.8 per cent increase in imports and a trade surplus of $35-billion.
The customs office said exports growth should accelerate in the third quarter.
Li Huiyong, an economist at Shenyin & Wanguo Securities in Shanghai said exports should support China’s growth in the second half of the year, even if Beijing may miss its 2014 trade growth target.
“We think China could miss its target for trade growth this year of 7.5 per cent. We expect combined exports and imports to rise 5 per cent in 2014 from a year ago,” Li said.
“The recovery in exports will help the recovery of China’s economy in the second half of this year. At least, we think exports will not be a drag on the broad economy.”
The Australian dollar eased after the data missed expectations, while most Asian stocks gave up some of their early gains and Japan’s Nikkei extended losses.
China’s exports were sluggish earlier this year but its trade performance has gained traction in recent months, helped by an improving U.S. economy and as the government gave exporters more tax breaks, credit insurance, and currency hedging options.
Imports also have been weak, highlighting sluggish domestic demand, but May activity data and June surveys on factory and service sector activity have spurred hopes that the economy is steadying.
Still, many economists say the recovery looks patchy and believe Beijing will have to unleash further stimulus measures this year in order to meet its 7.5 per cent economic growth target.
China’s growth quickened in the second quarter from the previous three months, but further modest government support measures will still be needed, Premier Li Keqiang said on Monday, without giving a GDP figure.
The government is due to issue second-quarter gross domestic product data on July 16. The latest Reuters poll showed China’s economy probably steadied in the second quarter, with annual growth holding firm at 7.4 per cent, as a slew of government policy measures kick in.
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