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Chinese trade sees surprise bounce as virus recovery picks up

The 2.7% growth in Chinese imports was the first since December while exports also beat expectations by rising 0.5%
The 2.7% growth in Chinese imports was the first since December while exports also beat expectations by rising 0.5%

Chinese trade saw surprise growth in June as the world slowly emerges from economy-strangling lockdowns, though officials warned of headwinds for recovery due to the spread of the Covid-19 pandemic. 

The figures come days before the release of data expected to show the world's second biggest economy returned to growth in the second quarter following a contraction in the first three months of the year.

The 2.7% growth in imports was the first since December and much better than the 9% contraction forecast in a Bloomberg News poll, while exports also beat expectations by rising 0.5%. 

In May, imports had collapsed 16.7% and exports retreated 3.3%.

A Chinese customs spokesman Li Kuiwen said that imports and exports showed "signs of recovery and stability" in the second quarter and that China was "forging ahead" with efforts to ensure stability in areas such as employment, foreign trade, and investment.

But he cautioned the external environment is "more grim and complicated" now, with Covid-19 plunging the global economy into a deep recession and international trade and investment experiencing sharp contractions.

In the first half, exports dropped 6.2% on-year while imports fell 7.1%, official data showed, reflecting the hit from the pandemic, which first surfaced in central China.

ING China economist Iris Pang told AFP agricultural purchases boosted imports and that the push could continue if floods ravaging much of central China persist, threatening food supplies. 

"We also see a broad-based recovery in exports," she said. 

China's economy is expected to have grown in the three months from April to June, having shrunk 6.8% in the preceding three months as the virus battered the planet. 

That was the first quarterly contraction since China began logging such data in the early 1990s. 

Beijing's trade surplus with the US - a major cause of anger in the White House - narrowed slightly to $29.4 billion in June, down 1.7% year-on-year. 

Tensions have been rising as the superpowers trade barbs on multiple fronts, including the pandemic and a new security law in Hong Kong. 

But Li said the US and China will continue to implement a phase-one trade deal signed in January that marked a truce in their long-running trade war. 

Analysts warn, however, that the trade recovery could lose momentum due to weak external demand from renewed lockdowns in key trading partners.