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China July exports up annual 5.1 percent, imports surge

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(Globalpost/GlobalPost)

BEIJING (Reuters) - A stronger-than-expected rebound in China's exports in July offered hope that the world's second-largest economy may be stabilizing after a slowdown that has prompted the government to shore up activity.

Data from the Customs Administration showed exports rose 5.1 percent in July from a year ago, beating economists' expectations for a 3 percent gain after June's 3.1 percent fall.

But because imports jumped 10.9 percent from a year earlier, more than five times what analysts had forecast, the trade surplus of $17.8 billion was lower than expected.

The data immediately lifted financial markets, with the Australian dollar leaping a third of a cent, but economists said it was too early to say trade flows had turned a corner.

"I would call it normalization, rather than recovery, of China's exports and imports," said Shen Jianguang, economist at Mizuho Securities Asia in Hong Kong.

"China is able to reach an annual growth rate of 5 percent in trade, but the official 8 percent target is a bit hard to hit."

China, the world's largest exporter, suffered its first fall in exports in 17 months in June, which led some analysts to say crumbling trade growth was testing Beijing's appetite for slower but better-quality economic growth.

China's trade performance has whipsawed this year after a government move to quash fictitious deals disguising illegal international cash transfers worsened data volatility.

Exports have been battered by weak demand in the United States and Europe as a lethargic global economy forces consumers in the West to tighten their belts. Shipments to southeast Asia, on the other hand, have held up but their strength is not enough to offset weakness elsewhere.

China's economic cooldown is set to be its worst in over two decades. Although Beijing has signaled it would tolerate slower growth, it has said it would staunchly defend its lower limit on growth -- estimated by some to be around 7 percent.

(Reporting by China economics team; Editing by John Mair)

http://www.globalpost.com/dispatch/news/thomson-reuters/130808/china-july-exports-annual-51-percent-imports-surge