China | July export growth surged to record high

The significantly better-than-expected export growth boosted by coronavirus-related product shipments, together with a volume expansion while total value dipping import growth helped to maintain the growth momentum extending in 2H 2020.

Key points

• Key points:
• The July export growth significantly surprised the market to the upside, surging to 7.2% y/y (consensus: -0.2% y/y) from 0.5% y/y in the previous month, reaching the seven months' high.
• On the other hand, import growth contracted to -1.4% y/y (consensus 1% y/y) from last month's reading of 2.7% y/y, mostly driven by the price effect.
• It is worth noticing that the strong medical care products that have supported exports in the latest months could be transitory. As countries have been relocating the pandemic-related supply chain back to home, the global demand of medical care products might gradually decline in the future.
• Looking ahead, despite of the surging July export growth data, the road ahead may be still bumpy, due to the widely spread COVID-19 around the world which unprecedentedly ruined the global value chain and economic activities. Thus, the external demand maintains a drag on growth throughout the rest of year.

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