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

What’s inside all of those shipping containers sailing from Chinese ports? “Labor-intensive goods” contributed significantly to the latest jump in exports, according to Founder Securities. “Footwear, toys, textiles and garments.” Ping An also cited a “sharp” uptick in “labor-intensive product exports.”

Also higher were exports tied to the “processing trade” -- goods such as consumer electronics assembled in China from high-tech parts imported from Japan, Taiwan and other countries. Shenyin Wanguo cited “signs that the processing trade is accelerating.”

July’s trade gap was the largest since the $40 billion recorded in November 2008, when China stepped up exports in response to the global financial crisis, and beat western market expectations by a long shot.

Chinese analysts blamed the July decline in imports on fewer shipments of and lower prices for raw materials from, for example, iron ore mines in Australia and oil suppliers in the Middle East.

The Shenyin Wanguo and HuaAn reports said the import decline should not be interpreted as a sign of economic weakness. The decline was “mainly associated with last year’s high base,” HuaAn said. “But with China’s overall economic improvement, looser monetary policies and the gradual emergence of support for the real economy, domestic demand will further improve. Import growth is expected to turn from negative to positive.”

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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