China Trade Surplus Beats Forecasts in July as Exports Stay Strong

China’s trade surplus exceeded market expectations in July as exports remained resilient, although faster import growth and softer export momentum pushed the surplus lower compared with the previous month.

Official government data released Friday showed China recorded a trade surplus of $112.50 billion in July. The figure surpassed economists’ expectations of $107.10 billion but declined from the $125.62 billion surplus reported in June.

Chinese exports increased 23.9% year-on-year in July, slightly above forecasts for 23.0% growth. However, the pace slowed from the 27% expansion recorded a month earlier, suggesting overseas demand for Chinese goods may be starting to moderate following strong growth during much of the year.

China’s export sector has benefited from overseas companies accelerating purchases amid uncertainty surrounding the U.S.-Iran conflict. That boost could fade in the coming months as foreign inventories remain elevated and businesses have less need to bring orders forward.

Capital Economics analysts noted that China's trade boom lost some momentum in July, but export and import values remained high. Strong global demand for electronics and green technology products continued to provide support to Chinese trade.

Recent economic indicators have also pointed to softer domestic conditions. China’s manufacturing purchasing managers index for July showed business activity losing momentum compared with previous months, adding to concerns over the strength of the broader economic recovery.

Imports, meanwhile, climbed 27.5% from a year earlier in July. That was below expectations for a 29.7% increase and represented a notable slowdown from the 36.0% growth registered in June.

China’s imports have risen sharply this year, supported by domestic demand for components used in artificial intelligence infrastructure. Higher global oil prices have also increased the value of the country’s import bill.

Exports have emerged as a key pillar of China’s economy in recent quarters, helping cushion weakness in consumer spending and private investment. While July’s stronger-than-expected China trade balance highlights continued resilience in external demand, slowing export and import growth could signal that trade momentum is beginning to cool.