China exports jump a surprise 7.2% in July driven by rising demand for medical supplies, despite Trump's 'tech grenade'
- China's exports for July jumped 7.2% thanks to rising demand for medical goods and automobiles as COVID-19 restrictions relax around the world, data showed on Friday.
- Analysts had expected exports to fall by 0.6%.
- However, a steady rise in external demand for China's exports is unlikely to last long since COVID-19 clusters have emerged since late July and might hamper trade, according to ING's think tank.
- China's strong data came as Donald Trump "lobbed another tech grenade in his cold war with Beijing," by banning US firms from business transactions with the parent companies of TikTok and WeChat.
- Visit Business Insider's homepage for more stories.
China posted an unexpectedly strong 7.2% jump in exports for July, driven by demand for medical supplies and automobiles, according to data released by the country's customs authority on Friday.
Analysts polled by ING's think tank had expected a fall of 0.6%. Meanwhile, China's imports for July fell 1.4% year-on-year.
In June, China's exports rose by just 0.5% year-on-year, driven by demand for textiles and garments. Imports in that grew 2.7%.
Economists have said that an increase in demand for medical products to safeguard oneself against coronavirus, like face masks, led to the bump in exports, according to CNBC.
It remains unclear whether this level of demand for medical goods will last much longer. But data observers say the jump is unlikely to carry on because COVID-19 clusters have emerged since late July, as lockdown restrictions may have been removed in a hurry.
China's July trade surplus stood at about $62 billion, the second-highest level recorded since October 2015, but down from May's record $63 billion. The politically sensitive trade surplus with the United States widened to $32.5 billion last month, from June's $29.41 billion.
Representatives from Washington and Beijing are due to meet next week to review the implementation of the phase one agreement on trade signed at the start of the year.
Overseas demand for luggage remained flat, reflecting the relentless ongoing difficulties of international travel, ING chief economist Iris Pang, said.
The economy's robust export growth came even as tensions with the US have steadily been on the rise.
Late on Thursday, President Trump issued an executive order that bans any US transactions with the Chinese companies that own social media platforms TikTok and WeChat.
The order said US firms had 45 day to September 15 before the ban would restrict "any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States," with the companies.
The major escalation showed how "the president lobbed another tech grenade in his cold war with Beijing, almost guaranteeing some kind of retaliation from the rival superpower," Connor Campbell, a financial analyst at SpreadEx, said.
Receive a daily update on your cellphone with all our latest news: click here.
Get the best of our site emailed to you daily: click here.
Also from Business Insider South Africa: