China's Q2 growth seen boosted by strong exports despite trade war fears
China's leadership is fighting a multi-front battle to sustain growth, a challenge made more difficult by the US president's tariff campaign.
US President Donald Trump has imposed levies on China and most other major trading partners since returning to office in January, threatening Beijing's exports just as it becomes more reliant on them to stimulate economic activity.
Washington and Beijing have sought to de-escalate their trade spat after reaching a framework for a deal at talks in London last month, but observers warn of lingering uncertainty.
Trump on Monday upped the ante, warning Russia's trading partners that he will impose 'very severe' tariffs reaching 100 per cent if Moscow fails to end its war on Ukraine within 50 days.
Western nations have repeatedly urged China—a key commercial ally of Russia—to wield its influence and get Vladimir Putin to stop his three-year-old invasion of Ukraine.
Official data today y will show how China's overall economy fared during the April-June period as leaders worked to shield the country from external pressures while encouraging consumers to spend.
An AFP survey of analysts forecast a 5.2 per cent expansion of gross domestic product in the second quarter compared with last year—above an official target of around five per cent set for the whole year.
Fuelling optimism, data from the General Administration of Customs showed yesterday exports rising much more than expected in June, helped by the US-China trade truce.
Imports also rose 1.1 per cent, higher the 0.3 per cent gain predicted and marking the first growth this year.
Customs official Wang Lingjun told a news conference on Monday that Beijing hoped 'the US will continue to work together with China towards the same direction', state broadcaster CCTV reported.
The tariff truce was 'hard won', Wang said.
'There is no way out through blackmail and coercion. Dialogue and cooperation are the right path,' he added.
But many analysts are anticipating slower growth in the next six months of the year, with persistently sluggish domestic demand proving a key drag.
Data released last week showed that consumer prices edged up in June, barely snapping a four-month deflationary dip, but factory gate prices dropped at their fastest clip in nearly two years.
The producer price index, which measures the price of wholesale goods as they leave the factory, declined 3.6 per cent year-on-year last month, extending a years-long negative run.
Economists argue that China needs to shift towards a growth model propelled more by domestic consumption than the traditional key drivers of infrastructure investment, manufacturing and exports.
Beijing has introduced a slew of measures since last year in a bid to boost spending, including a consumer goods trade-in subsidy scheme that briefly lifted retail activity. — AFP
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