China's Exports Growth Tops Expectations

China's exports grew more than expected in August mainly due to base effects, while imports dropped unexpectedly from last year, data from the General Administration of Customs showed Monday.

Exports grew 9.5 percent on a yearly basis in August, faster than the expected increase of 7.1 percent.

At the same time, imports were down 2.1 percent annually, in contrast to the expected rise of 0.1 percent. Imports had dropped 1.4 percent in July.

As a result, the trade surplus totaled $58.9 billion versus the expected level of $50.5 billion in August. However, the surplus declined from July's $62.3 billion.

China's export data still looks good, Iris Pang, an ING economist said. But there are risks of lower growth in the coming months, mainly from the technology war.

Julian Evans-Pritchard, an economist at Capital Economics, said while exports will continue to benefit from the recovery in global demand, the forthcoming slowdown in shipments of Covid-19 related goods means that further upside is probably limited.

With credit growth still accelerating and infrastructure-led stimulus still ramping up, import volumes should remain strong in the coming months, Evans-Pritchard noted. Coupled with a further gradual recovery in commodity prices, growth in import values should therefore return to positive territory again before long.