Key facts
- China's exports are projected to increase by 25% year-on-year in August, up from 23.9% in July.
- Imports are forecast to grow by 30% year-on-year in August.
- The trade surplus is expected to widen to $119.05 billion in August.
- Resilient exports are supporting China's economic growth amid weak domestic demand and investment.
China's exports are anticipated to accelerate in August, growing by an estimated 25% year-on-year in dollar terms, according to a Reuters poll of 35 economists. This projected increase, up from 23.9% in July, indicates a continued reliance on external demand to bolster the world's second-largest economy amidst persistent domestic weaknesses.
Imports are also forecast to show stronger growth, with a projected 30% year-on-year increase in August, compared to 27.5% in July. Consequently, China's trade surplus is expected to widen to $119.05 billion from $112.5 billion in the previous month.
Exports have become a crucial pillar for China's economic growth, especially as domestic consumption remains tepid and investment slumps. This export strength, buoyed by global demand for high-tech goods like chips, has helped sustain momentum despite a solid start to the year. However, the reliance on exports also raises concerns among Western trading partners who are seeking to balance trade with China and potentially implement trade barriers.
Policymakers have set a GDP growth target range of 4.5-5% for 2026, but economic momentum slowed to 4.3% in the second quarter. Recent data for July showed continued weakness in domestic demand and investment, with the official manufacturing PMI for August indicating only subdued manufacturing activity despite improvements.