China | Surprising resilience of August exports amid the global pandemic

Summary

Coronavirus-related product shipments continued to support China's August export growth, which helped to maintain the growth momentum. On the other hand, import growth remained in the negative territory, mostly due to the price effect.

Key points

• Key points:
• The August export growth surprised the market to the upside, surging to 9.5% y/y from 7.2% y/y in the previous month, driven by Coronavirus-related product shipment coupled with overseas countries eased their COVID-19 lockdown measures.
• On the other hand, import growth further contracted to -2.1% y/y from last month's reading of -1.4%, mainly due to the price effect.
• China's export to the US reached record high in August, partly due to the front-loading behavior of escalating China-US trade tensions.
• Although the exports of medical equipment and devices help to boost the country's exports, it remains to be seen whether such external demands are temporary or not as countries are building up their own production chain.
• Looking ahead, despite the solid export growth data, the road ahead may be still bumpy. Global recession still weighs on external demand.

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