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Investing.com-- China’s trade balance grew more than expected in June, driven chiefly by consensus-beating growth in exports as overseas demand picked up after the country and the U.S. lowered their respective trade tariffs.
Trade balance grew to a surplus of $114.77 billion, customs data showed on Monday, more than expectations of $113.20 billion. The surplus also picked up sharply from the $103.22 billion seen in the prior month.
The healthy surplus was driven chiefly by stronger-than-expected exports. China’s exports grew 5.8% year-on-year in dollar terms in June, more than expectations of 5% and much higher than the 4.8% rise seen in the prior month.
Exports recovered steadily from lulls seen earlier this year, especially after Beijing and Washington agreed in mid-May to slash their respective trade tariffs. Both sides confirmed the agreement in June.
Customs data showed China’s rare earth exports picked up in June from the prior month, as progress in trade talks with the U.S. saw China issue more export licenses to local producers. Washington had earlier this month relaxed some chip technology export restrictions against Beijing.
But domestic demand in China appeared weak, with imports rising 1.1% y-o-y in June, less than expectations of 1.3%. Still, imports recovered to expansion territory after a 3.4% decline in the prior month.
Monday’s data showed China’s trade activity improved substantially in June, setting the country up for a positive gross domestic product reading for the second quarter. The print is due on Tuesday, and is expected to show growth surpassed Beijing’s 5% annual target.