According to data released by the National Bureau of Statistics of China, imports went up by 28.1% (year-on-year). The figure is below the previous month’s 36.7% and below expectations of 33%. Exports gained 19.3%, below the previous month’s 32.2% and expectations of 20.2%.
In July, the trade balance stood at $56.59b, above expectations of $51.54b the previous month’s $51.5b.
This weakness is being linked to the spread of the Delta variant, which is believed to be more transmissible than other strains and is currently threatening economic recovery. This has already slowed down the economic recovery of some of China's main trade partners, among them the United States. Exports to the United States have risen by 40% since the beginning of the year, while imports have advanced by 50%.
Another factor that is threatening economic recovery is rising raw material prices which have been causing trouble in the manufacturing sector.
"The pandemic worsened in other Asian developing countries, which may have led to a relocation of trade toward China. But leading indicators suggest exports may weaken in coming months," commented an analyst at Pinpoint Asset Management.
Like the rest of the world, China is now dealing with COVID-19 outbreaks, most recently in the province of Hubei, which was the epicenter of the pandemic. Since the beginning of the pandemic, 93,826 COVID-19 cases have been reported in China, as well as 4,636 deaths. Cases are now surging in places like Wuhan, which is the city where the coronavirus emerged first.
The Chinese government is now attempting a mass vaccination campaign, following other governments around the globe. So far, 1.77 billion dosages have been distributed among the local population, while 223 million individuals are now fully vaccinated, making China one of the leading countries in this regard.
Since the beginning of the week, the Chinese yuan has gained 0.09% against the US dollar, recovering from the previous week's losses and closing Sunday's session at the 0.1542 level. By 6:46 GMT the Chinese Yyuan gained 0.10% against the US dollar, hitting the 0.1544 level.