China's exports and imports grow much less than expected in July, raising concerns over whether global demand is starting to cool even as major Western central banks consider scaling back years of massive stimulus support. As David Pollard reports, German imports also fell more sharply than exports in June, pushing the trade balance to a 10-month high.
Economists who expected a summer wobble in China's trade got more than they bargained for. Exports up, imports up - but both by far less than forecast in July. While - though still strong at 8.8 per cent - overall trade growth slowed. Auguring perhaps, a slight pullback in China's recent strength. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "They grew close to 7 percent in the first half of the year. They've been helped quite a lot by the weaker yuan. They've been helped quite significantly by their spending policies domestically, and I think that's likely to slow. Things like infrastructure spending are likely to slow in the second half of the year and therefore that should translate through to lower levels of growth." Germany isn't immune to a touch of summer gloom either. Exports saw their biggest drop in nearly two years June. Imports - down four and half per cent - their biggest drop in over eight. But the weaker numbers putting upwards pressure on its trade surplus. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "You've got to remember Germany's been running a trade surplus for a long time, and while there has been some pressure on Germany to try and boost investment more than we saw previously and increase minimum wage, the pressures are only been marginal at best and Germany will only do what Germany wants to do at the end of the day." While for China, a nearly 47 billion dollars trade surplus could complicate relations with Donald Trump. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "One minute he seems to be very supportive of what they're doing but it doesn't seem to take too much from him be critical at any stage. So I'm sure this will be something that comes out again in the not too distant future." If in July, the growth of imports from the US - at over 24 per cent - far outstripped China's export growth to it. For one month at least, Trump enjoying a taste of America First.