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Watch Out for a Swelling Wave of Exports From China to the World

BEIJING ( TheStreet) -- China’s record, $47 billion trade surplus in July was neither unintended nor a flash in the pan.

That’s a key take-away from several Chinese securities analyst reports released Monday -- and a warning to American investors whose stocks are sensitive to fluctuations in U.S.-China trade.

What the government last week said was a 14.5% surge in China’s exports from July 2013 to nearly $213 billion last month signaled a boom in shipments to the U.S., Europe and the rest of Asia that’s likely to grow through year’s end. Imports, meanwhile, fell 1.6% in July to $166 billion.

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Shenyin Wanguo Securities predicted “the export situation will be better in the second half than the first half.” HuaAn Securities observed “an economic recovery in the developed world is generating substantial opportunities for Chinese exports.”

Ping An Securities analysts wrote that “overall, we believe that exports in the second half will be better than the first half.” Anxin Securities predicted that “the global economic recovery will continue,” and thus “China's export growth is expected to be maintained at a level near 10%” through the second half.

The export push is being encouraged by the government via adjustments to taxes, customs regulations and foreign exchange rates that started in the second quarter, analysts said. The government is also trying to boost the domestic economy with a “mini-stimulus” program that includes infrastructure spending and easier credit at state banks.

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Hongyuan Securities pinned the “steady growth in foreign trade” and “a positive effect on exports” to measures implemented since April 1 by “the State Council, the People’s Bank of China, the State Administration of Taxation and other relevant ministries.”

Founder Securities analysts credited President Xi Jinping for boosting overseas sales of Chinese goods during his recent visits to Latin America and South Korea. Talks in July on a proposed free trade agreement between China and South Korea contributed to a 32% increase in exports to the smaller country in July, the report said.

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