June trade beats outlook on robust demand, headwinds eyed

China reported stronger- thanexpected June trade figures on Thursday, bolstered by firm global demand for Chinese goods and a robust domestic appetite for construction materials, but curbs on lending could weigh on imports later this year.

Exports rose 11.3 percent year- on- year, while imports expanded 17.2 percent, both beating analysts’ expectations, data from the General Administration of Customs showed Thursday.

While exports benefited from solid demand for electronics and industrial goods, a growing trade surplus, particularly with the US, may add to trade tensions as US President Donald Trump seeks to boost activity in his country’s manufacturing sector.

Analysts said that economic and political risks could undermine much of the strong trade momentum seen in the first half of this year.

“Looking ahead, we expect export growth to slow on uncertainties in external demand due to rising geopolitical risks and the stronger yuan- US dollar exchange rate in the first half of 2017,” Nomura researchers said in a note after the data release.

China posted a trade surplus of $ 42.77 billion in June, slightly above analyst forecasts for a surplus of $ 42.44 billion and wider than May’s $ 40.81 billion.

China’s exports denominated in yuan rose 15 percent in the first half, while imports jumped 25.7 percent.