China's balance of trade surplus against the world shrank in August compared to July. Government data shows China posted a balance of trade surplus in August of $58.9 billion (RMB416.6 billion), which was 1.5 percent lower compared to a surplus of $62.3 billion in July. In August, China's merchandise exports rose 9.5 percent year-on-year while imports fell 2.1 percent.
The General Administration of Customs (GAC) said the trade surplus of $58.9 billion far exceeded the $50.5 billion economists had expected.
Analysts said export growth surged due to strong orders for medical equipment and supplies from its trading partners while falling imports confirmed a negative investment outlook prevading the business sector.
From January to August, China's imports and exports to ASEAN (the Association of Southeast Asian Nations), the European Union and Japan increased. On the other hand, trade with the United States continued to wilt.
Together, the 10 member states of ASEAN are now China's largest trading partner. The value of bilateral trade with ASEAN improved 7 percent to $429 billion (RMB2.93 trillion) from January to August, accounting for 14.6 percent of China's total foreign trade.
The total value of China-U.S. trade stood at $324 billion (RMB2.42 trillion) for the first eight months, a slight loss of 0.4 percent year-on-year. Trade with the U.S. was responsible for for 12 percent of China's total foreign trade in the same period.
Exports to the U.S. stood at $274 billion (RMB1.87 trillion) down 0.5 percent, while imports from the U.S. dropped to $193 billion (RMB1.32 trillion), down 0.8 percent.
As a result, China's trade surplus with the U.S. widened to $34.2 billion in August from $32.5 billion U.S. dollars in July.
"The surge in the trade surplus could lend further strength to RMB against the U.S. dollar, but a worsening bilateral relationship might also add downside risks to RMB," said Lu Ting, Chief China Economist at Nomura.
Lu also said the growth of soybean imports from the U.S. dropped further to 1.3 percent year-on-year in August from 16.8 percent in July. U.S. soybean imports are expected to recover in the next few months as China accelerates its purchases of soybeans, especially during the harvesting season between September and November.
