CHINA: Record export in July does not lessen worries

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China's export engine proved to be more resilient than market expectations, jumping 38% year-on-year to another record high of USD 146bn in July, said the China Customs. This showed that the debt crisis breaking out in some European countries in April has not had much impact on China's export sector.

However, the strength of export was not enough to dissipate the clouds over the prospect of the Chinese economy in the rest of the year, as import in July grew 23% year-on-year, cooling sharply from a gain of 34% in June, which could show that the domestic demand is cooling.
 
The two key pillars of China's domestic demand, housing and cars, were both weakening in July. According to the National Bureau of Statistics, investment in housing development rose 33% y-o-y in July, down from a gain of 46% in June.
 
Meanwhile, China's auto sales rose 14% y-o-y in July, which was the slowest monthly growth this year, said the China Association of Automobile Manufacturers.
 
Some economists expect that the sluggish recovery in Europe and USA, China's top two export markets, together with the weak domestic demand, may pull China's GDP growth back to one-digit growth in H2.