Summary of J.P. Morgan's Research on China's Trade Data Industry Overview - The report focuses on China's trade data for July, highlighting the performance of exports and imports in the context of global economic conditions and trade dynamics. Key Points on Exports - **July Exports Performance**: Exports declined by 1.9% month-on-month seasonally adjusted (m/m sa) but increased by 7.2% year-on-year (y/y), surpassing J.P. Morgan's expectation of 6.2% y/y and market consensus of 5.6% y/y [1][4] - **Trend Growth Momentum**: The trend growth momentum slowed to 0.7% over three months annualized (3m/3m saar), down from 7.5% in June and 20.9% in May, indicating a significant deceleration [1][4] - **Trade Surplus**: The trade surplus narrowed to US$98.2 billion from US$114.8 billion in June [1][4] - **Export Destinations**: Exports to the US fell by 6.6% m/m sa after a recovery of over 20% in June, while exports to Japan, the EU, and ASEAN also saw declines [2][4] - **Product Breakdown**: Exports of low-end consumer goods decreased by 5.3% m/m sa, mechanical and electrical products by 1.2%, and high-tech products by 1.8% [3][4] Key Points on Imports - **Import Growth**: Imports grew by 4.1% y/y and 1.6% m/m sa, which was better than J.P. Morgan's forecast of -0.3% y/y and market consensus of -1.0% y/y [1][4] - **Commodity Demand**: The increase in imports was partly driven by strong demand for refined petroleum products, which rose by 18.8% m/m sa [6][4] - **Domestic Demand**: Overall, imports have been softer than expected, reflecting weak domestic demand [6][4] Future Outlook - **Export Projections**: Overall exports are expected to decline by 9% in 3Q compared to a 7.5% increase in 2Q, primarily due to lower global demand and the end of US front-loading [4][7] - **Impact of Tariffs**: The report suggests that punitive US tariffs on transshipment will lead to a shift in the share of exports towards the US at the expense of ASEAN [4][8] - **GDP Contribution**: Net exports contributed 31 percentage points to real GDP growth in 1H, but this is expected to drop to 13 percentage points for the full year as external demand slows [7][4] Additional Insights - **Trade Dynamics**: The report notes a reversal in trade dynamics since the implementation of the Liberation Day tariffs, with exports to the US declining sharply while those to ASEAN and the EU increased [4][8] - **High-Tech Products Resilience**: Despite the overall slowdown, imports of high-tech products maintained solid trend growth for six consecutive months, indicating resilience in this segment [6][4] This summary encapsulates the critical insights from J.P. Morgan's analysis of China's trade data, providing a comprehensive overview of the current state and future expectations of the trade landscape.