China's Export Increase Unexpectedly

China's exports grew unexpectedly in June as easing of the coronavirus containment measures in most of the developed economies boosted foreign demand, official data showed Tuesday.

In dollar terms, exports climbed 0.5 percent on a yearly basis in June, the General Administration of Customs reported. Economists had forecast an annual fall of 1.5 percent after falling 3.3 percent in May.

Likewise, imports increased 2.7 percent on year, confounding expectations for a decrease of 10 percent and reversing a 16.7 percent fall in May.

Consequently, the trade surplus totaled $46.42 billion in June versus a $62.9 billion surplus posted in May. The expected level was $58.6 billion.

The smaller trade balance confirms the assessment that GDP growth in the second quarter of 2020 should still be negative on a yearly basis, Iris Pang, an ING economist said. The increase in imports added to evidence that domestic demand was strong at the end of the second quarter, Julian Evans-Pritchard, an economist at Capital Economics, said.

Exports also strengthened as slower shipments of products related to covid-19 were more than offset by strength elsewhere. While exports are due for a pullback, import growth should remain robust, he noted.

In yuan terms, exports advanced 4.3 percent and imports gained 6.2 percent annually in June.