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China's July trade surplus almost triples to US$47.3b

China's monthly trade surplus leaped to US$47.3 billion (S$59.3 billion) in July, nearly tripling year-on-year, official data showed Friday (Aug 8), as exports jumped while imports surprisingly declined.

BEIJING: China's monthly trade surplus leaped to US$47.3 billion (S$59.3 billion) in July, nearly tripling year-on-year, official data showed Friday (Aug 8), as exports from the world's second-largest economy jumped while imports surprisingly declined. The figure is believed to be a record for any month.

Exports increased 14.5 per cent year-on-year to US$212.9 billion, the General Administration of Customs announced, while imports decreased 1.6 per cent to US$165.6 billion. The surplus, which compared with one of US$17.8 billion during the same month last year, far exceeded the median forecast of US$27.7 billion in a Wall Street Journal survey of 15 economists.

Export growth accelerated from June's gain of 7.2 per cent and beat expectations of 8.0 per cent. However imports, which had gained 5.5 per cent in June, failed to match the forecast of a 3.0 per cent increase.

The mixed results come as China's economic activity has picked up steam after authorities introduced measures to shore up growth after it slowed at the beginning of the year. China's gross domestic product (GDP) accelerated to a higher-than-expected 7.5 per cent in the second quarter, up from 7.4 per cent in the previous three months, which was the worst since a similar 7.4 per cent expansion in July-September 2012.

The government in March set its annual GDP growth target for 2014 at about 7.5 per cent, the same as last year. The target, which is set conservatively and usually exceeded, is closely watched by economists as a weathervane for official expectations about the economy.

China's leaders are trying to shift the country's economic model to one where its increasingly affluent consumers propel economic growth rather than large, state-supported investments. But since April, in a bid to boost growth authorities have introduced measures including tax breaks for small enterprises, targeted infrastructure outlays and incentives to encourage lending in rural areas and to small companies.

The trade data came after surveys of China's manufacturing sector showed that activity increased sharply in July, with the official purchasing managers' index (PMI) reaching its highest level in more than two years. A closely watched private survey came in at an 18-month high.

Despite recent signs of vigour, economists have expressed concern about the potential for China's vast and opaque property sector to dent growth expectations. An independent survey of China's property prices showed that their decline accelerated in July. The average price of a new home in 100 major cities was 10,835 yuan (US$1,757) per square metre, down 0.81 per cent from June, the China Index Academy (CIA) said.

It was the third consecutive monthly decline and an acceleration from the falls of 0.50 per cent in June and 0.32 per cent in May, which was the first in nearly two years, according to CIA data. Property is sensitive in China, where the government must balance the need to satisfy citizen demands for affordable housing against the reality that local governments make much of their income from land sales to developers.