By Gina Lee
Investing.com – China’s trade data for August was surprisingly better than expected, with solid global demand counteracting the impact from the country’s latest COVID-19 outbreak and supply chain bottlenecks.
The country’s economic recovery from COVID-19 was halted due to the recent outbreak of COVID-19 cases involving the Delta strain. High raw material prices, slowing exports, tighter measures to curb property prices and a campaign to reduce carbon emissions also contributed to the slowdown.
Exports grew 25.6% year-on-year, according to data released earlier in the day. Forecasts prepared by Investing.com had predicted a 17.1% increase while the previous month’s growth was 19.3%.
Some of the gridlock in Chinese ports seems to have cleared, giving export figures a boost. Ports on China’s eastern coast were congested as Ningbo Zhoushan port, the country’s second-largest container port, shut down for two weeks thanks to a COVID-19 case. The closure placed further pressure on global supply chains already dealing with a shortage of container vessels and high raw material prices.
Meanwhile, imports grew 33.1% year-on-year, with forecasts prepared by Investing.com predicting a 26.8% growth and a 28.1% growth recorded for the previous month. The trade balance was $58.34 billion, against the $51.05 billion figure in Investing.com forecasts and the previous month’s $56.59 billion reading.
China has brought its latest COVID-19 outbreak largely under control, but the economic damage from restrictive measures imposed to do so has already been done. Investors now widely expect the People’s Bank of China to further reduce the amount of cash banks must hold as reserves later in the year. The central bank already cut the amount in July, which released around CNY1 trillion ($154.82 billion) in long-term liquidity into the economy.
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