According to the China Beige Book, a survey of 1,321 businesses, China's economy improved in June, driven by a rebound in U.S. exports and a notable increase in luxury goods sales. After a slowdown in April and May, where retail sales fell for the first time since the pandemic, the report indicates that factory activity accelerated and U.S.-bound orders saw significant year-on-year growth.
China's exports to the U.S. rose by 11.3% in April and 35.4% in May, recovering from previous declines due to tariffs imposed by the Trump administration. The surge in freight rates for shipping between Asia and the U.S. suggests that businesses are rushing to ship goods before potential tariff increases.
Senior economist Tianchen Xu noted that while China's export order growth to other regions slowed, strong demand for AI technology and falling oil prices could alleviate some economic pressures. Analysts, including Goldman Sachs, have revised their GDP growth forecasts upward, anticipating a third-quarter growth of 5% due to lower oil prices and increased fiscal spending.
Upcoming economic data releases on July 14 and 15 will provide further insights into China's economic performance, with expectations of a positive trend continuing into the second half of the year