By Gina Lee
Investing.com – China reported positive customs data on Tuesday, an encouraging sign that the world’s second largest economy is recovering from the COVID-19 virus.
Exports rose 0.5% year-on-year in June, higher than analyst expectations of a 1.5% drop and last month’s 3.3% drop. Imports rose 2.7% year-on-year during the same month, also beating expectations of a 10% drop and a 16.7% slide in May.
Chinese exports and imports benefitted from some countries loosening lockdown measures, and the resultant uptick in economic activity. But trade volumes for the first half of the year remain well below previous years’ levels and fresh outbreaks of the virus prompted the re-implementation of lockdown measures in cities such as Melbourne and Hong Kong,
Meanwhile, the trade balance decreased to $46.42 billion, much smaller than the forecasted $58.60 billion and May’s $62.93 billion. Simmering U.S.-China tensions over trade and Hong Kong’s national security law enacted on July 1 led to a wider trade surplus with the U.S.
An increase in the trade balance “could be the major support for the second quarter’s GDP growth, but it could only help to a certain extent,” Iris Pang, chief economist for greater China at ING Bank NV, told Bloomberg ahead of the data’s release.
Investors will now be looking to a second bath of Chinese data, including GDP, due on Thursday.