China's exports and imports both came in stronger than expected in June, reflecting resilience in the world's second-largest economy amid Beijing's effort to reduce debt and boding well for next week's report on overall growth.
China's exports rose 11.3% in June from a year earlier, marking the fourth straight month of gains, thanks to robust external demand for Chinese goods, the General Administration of Customs said Thursday. The increase came in higher that the 8.7% growth in May and a forecast for a 9.0% rise by economists polled by The Wall Street Journal.
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Imports in June also came in stronger than expected, expanding 17.2% from a year earlier, after a 14.8% increase in May. Economists had forecast a 12.4% gain.
China's trade surplus widened in June to $42.77 billion from $40.81 billion in May, falling short of a median forecast for a $44.2 billion surplus.
Continued global economic recovery and improving external demand boosted Chinese exports while imports were buoyed by steady domestic growth and higher commodity prices, China's customs officials said in a briefing on Thursday.
China's trade data is closely watched as a barometer of strength in global trade though exports have become a less important factor in China's own growth in recent years.
As the world's biggest exporter, China's economy once depended heavily on outbound shipments. After the global financial crisis crippled external demand, Beijing moved to make the economy more reliant on domestic consumption.
Thanks to strong demand from Europe and the U.S., exports contributed to overall economic growth in the first quarter after export declines in the past two years had dragged overall growth down.
"Export contribution to China's GDP growth is expected to continue in the second quarter, which could also help offset the slowdown from infrastructure and property investment," said Liu Xuezhi, a Bank of Communications economist.
China's statistics bureau is set to release GDP and other economic data on Monday.
After securing strong growth in the first quarter, Beijing has made it a priority to rein in crippling debt levels and property speculation. Government measures to restrict home purchases in many cities are dampening investment in the real-estate sector while the regulatory crackdown on financial leverage in recent months has pushed up borrowers' lending costs. Economists widely believe both moves curtail demand at home.
"Looking ahead, exports should continue to do well given the relatively positive outlook for China's main trading partners," said Julian Evans-Pritchard, an economist with Capital Economics. "But we are skeptical that the current pace of imports can be sustained for much longer given the increasing headwinds to China's economy from policy tightening."
Grace Zhu and Liyan Qi
(END) Dow Jones Newswires
July 13, 2017 01:54 ET (05:54 GMT)