China’s exports rose dramatically to US$212.9 billion in July, up 14.5% year-on-year, higher than market expectations, according to data released by China’s General Administration of Customs.
China’s import decreased by 1.6% to US$165.6 billion last month, versus a 5.5% increase in June, largely due to a high base at the same time last year.
This led to a significant trade surplus of US$47.3 billion in July, up 49.7% from June’s surplus of US$31.6 billion.
July’s foreign trade data offers a more reliable reading of China’s underlying export situation than in the past few months, as distortions from last year’s over-invoicing should be almost completely lifted, according to a report by UBS AG.
The high trade surplus also suggests that the appreciation pressure on China’s RMB will likely increase, if the People’s Bank of China doesn’t actively intervene into the foreign exchange market, says a report by ANZ Research.