By Geoffrey Smith
Investing.com -- China's exports grew at their fastest rate this year in June, as the easing of lockdowns in the key hub of Shanghai eased the bottlenecks around the world's largest port and allowed producers to restore operations to normal.
Exports were up 17.9% on the year, an acceleration from 16.9% in the year through May and well ahead of consensus forecasts for 12.0% growth. Imports, by contrast, grew only 1.0% on the year, and have now effectively stagnated in year-on-year terms for the last four months.
The data point to an improvement in the conditions for global supply chains that have played such a large part in driving inflation to 40-year highs in Europe and North America this year. They are consistent with a sharp fall in other proxies for supply chain pressures, including the Baltic Dry Index for freight shipping, which has fallen some 40% since late May as Shanghai lifted its COVID-19 restrictions.
Shanghai's foreign trade alone rose 36% from May, the Global Times quoted customs official Li Kuiwen as saying.
However, the import numbers point to a continued cooling off of activity: base metal imports, which drive the key manufacturing and industrial sectors, were broadly lower - as were imports of fossil fuels, against a backdrop of surging prices.
Iron ore imports fell 3.8% on the year to 89 million tons, while copper ore imports fell 5.9%, and Coal imports fell 7.6%. Crude oil imports were down over 21%.
The construction and real estate development sectors, which account for the largest part of base metal demand, remain in crisis, as the country's real estate bubble slowly deflates. In recent weeks, more Chinese developers have missed payments on their debts, while Bloomberg on Wednesday cited Citigroup research saying that homebuyers in some 22 cities have decided to stop paying their mortgages, protesting against project delays and a drop in property prices.
Nor has the threat of renewed lockdowns entirely vanished. Shanghai authorities have ordered two rounds of mass testing for most of the city's 25 million residents this week in response to signs of a new outbreak. Wednesday's data, however, suggested that the number of cases may be leveling out, reducing the need for more extreme restrictions on business life.
All the 55 new local cases reported for July 12 were discovered among people already under isolation orders, Reuters reported. As such, the danger of community spread appears to have receded.