UBS Economics-China Economic Perspectives _Exports improved in July, weakn...-117125067

ab7 August 2025Global ResearchChina Economic PerspectivesExports improved in July, weakness likely aheadHeadline export growth edged up, albeit with mild retreat in shipment levelExport growth edged up to 7.2% YoY in July, higher than its prior reading of 5.9% YoY. On a seasonally adjusted basis, our estimate suggests that the export shipment levels edged down from June, and the export momentum (%3m/3m, sa) dropped slightly. In real terms, we estimate export growth picked up to 8.8% YoY from 6.7% YoY in June.Shipments to the US slid, rushed orders may have started to moderateFollowing the temporary rebound in June, shipment levels to the US slid by 3% MoM on a seasonally adjusted basis in July, and widened the YoY contraction to -21.6% YoY (vs -16.1% in June). Shipment levels remained at the low-end of history, albeit modestly higher than April/May. Some front-loading was likely still at play in July, especially before the extension of US-China trade talks. Meanwhile, shipment levels to ASEAN declined by 2.6% MoM on a seasonally adjusted basis in July with its export momentum cooling (%3m/3m), even though the YoY growth remained solid at 16.6% YoY on a lower base (vs 16.8% in June). As such, it seems the rushed shipment-related demand for materials from China may have started to decelerate, as the tariff clarity for Asian economies improved in July. China’s export growth to the EU stayed solid at 9.2% YoY, while that to Japan moderated to 2%. In particular, export growth of electronic products decelerated from 6.2% YoY to 0.6%, led by a sharp decline in mobile phones (-22%) and ADP, but shipments of electronic ICs gained more traction. As part of the Geneva consensus, export declines of rare earths narrowed significantly (to -18% YoY, vs -47% in June).Import growth picked upTotal import growth picked up to 4.1% YoY in July from 1.1% in June, and we estimate a modest uptick of real import growth (from 3% to 4.9%). Imports of the commodities basket recorded a narrowed contraction of -4% YoY vs -9% previously. In particular, with both volume growth and price improving, the decline of crude oil import narrowed in July in value terms (from -15% YoY in June to -5.9%), which contributed about 45% to the headline import growth rebound. Import volumes of iron ore decelerated, while that of copper ore rebounded. In addition, we note further deterioration of import growth of ADPs (-11.9% YoY, vs 10.5% in June), reflecting high base and perhaps some lingering US export controls over AI-related tech goods exports to China. On the other hand, tech components imports registered further improvements, which may reflect that tech supply chain producers were loading up components for shipments to the US.Uncertainties remain elevated, export growth to slow in H2Over the past month, the US has announced trade deals with some of its major trading partners and new tariff rates for over 70 economies. Improved tariff clarity, especially for Asian economies, will likely