China's Exports Surge to Nearly 2-Year High, Boosting Economy Amid Deflation
September, 17 2024
Unexpected Export Growth in August
According to Bloomberg, China’s exports unexpectedly surged in August, hitting a near two-year high, surpassing forecasts. Meanwhile, imports grew only 0.5%, resulting in a trade surplus of $91 billion USD, according to China’s Customs Administration.
This export boom has helped offset the downturn in China’s real estate sector and the ongoing deflation. However, the flood of cheap Chinese goods into global markets has triggered trade barriers, with the U.S., South America, and Europe imposing tariffs.
China’s Economic Struggles Persist
Despite strong exports, China’s economy is struggling to regain momentum. Economic indicators for August show four consecutive months of manufacturing contraction, while core inflation hit a three-year low.
Chinese exporters have cut prices to maintain sales, with export volume rising faster than export value. Data released on Monday, September 9, revealed that the average price of Chinese exports fell 2.7% year-over-year in August.
Global Concerns Over Cheap Chinese Goods
The rising flood of low-cost Chinese goods has raised concerns among trading partners. Some countries have imposed tariffs on Chinese EVs, steel, and other products. China’s steel exports surged to 9.5 million tons, a three-month high, despite rising trade barriers from global partners.