June trade data beats expectations

China’s trade performance continues to surprise to the upside.

Per June trade data released by customs (GAC) on Monday:

• Exports grew 5.8% y/y, up from 4.8% in May
• Imports edged up 1.1% y/y, reversing three consecutive months of decline
• The monthly trade surplus hit USD 114.8 billion, up a punchy 16.0% y/y and marking the highest June surplus on record

Exports to the US fell 16.1% y/y – a vast improvement over May’s 31.5% drop – reflecting the recent US-China trade truce.

• On a month-on-month basis, exports to the US rebounded by 32.1%.

Exports to the EU, meanwhile, rose 7.6% y/y – the slowest pace in four months.

• This could be a sign that trade tensions with the bloc are starting to bite.

At the same time, exports to ASEAN and Africa grew 16.8% and 31.8% y/y, respectively – both up over May.

Get smart: China’s trade surplus in Q2 hit USD 314.2 billion – up a hefty 21.5% y/y.

• We estimate that net exports could have added upwards of 1.3 percentage points to China’s Q2 GDP growth rate – all the more remarkable given Washington's unprecedented tariffs on Chinese exports.