China’s Trade Balance Surplus in August

China’s trade balance grew more than expected in August as the country’s export industries shrugged off pressure from trade restrictions imposed by the U.S. and its allies.

However, imports grew at a much slower pace than anticipated, raising concerns about slowing local demand.

Trade Surplus Data

The trade balance rose to a surplus of $91.02 billion in August, according to government data released on Tuesday. This reading exceeded expectations of a surplus of $82.10 billion, improving from the $84.65 billion surplus seen in July.

Export Growth

Exports rose by 8.7% year-on-year, outperforming expectations for a growth of 6.5% and accelerating from the 7% increase recorded in July.

This growth occurred despite steep U.S., Canadian, and EU import tariffs on several major Chinese industries, particularly the electric vehicle sector, due to concerns about competition and dumping practices.

U.S. lawmakers are also considering additional restrictions on Chinese companies, especially in the biotechnology sector, which could further impact trade.

Concerns over Local Demand

The increased trade restrictions pose significant challenges for China’s export industries, a vital driver of the nation’s substantial trade surplus, raising doubts about the sustainability of its impressive export growth.

Nonetheless, China’s overall trade surplus also benefited from a smaller-than-expected rise in imports, which increased by only 0.5% year-on-year, missing the forecast of 2% and slowing sharply from the 7.2% growth in July.

The weaker import figures heighten worries about declining local demand, especially as China faces weak consumer spending and sluggish economic growth.