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China's July trade surplus blows past estimates

Containers waiting to be transported in Qingdao port in Qingdao, east China's Shandong province.
STR | AFP | Getty Images
Containers waiting to be transported in Qingdao port in Qingdao, east China's Shandong province.

China delivered a strong set of trade data on Friday, helping to temper losses in Asian stock markets spooked by escalating Middle East tensions.

The country's exports jumped 14.5 percent in July from the year-ago period, official data showed, much better than a Reuters forecast for a 7.5 percent increase and after climbing 7.2 percent in June.

Imports fell an annual 1.6 percent, compared with expectations of a 3 percent rise and following the 5.5 percent gain in June.

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This pushed trade surplus to a record high of $47.3 billion in July, blowing past the $27 billion target and up from $31.5 billion in June.

The Australian dollar pared losses after hitting a two-month low earlier in the session on news that U.S. has authorized air strikes in Iraq. Shanghai stocks rose 0.1 percent after trading in negative territory for most of the session.

The trade reading is the latest batch of positive news on China's economy, which grew 7.5 percent on year in the second quarter, up from 7.4 percent in the first quarter, thanks to a burst of stimulus measures from Beijing to support growth.

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According to Chi Lo, senior economist of Greater China at BNP Investment Partners, while exports will increasingly become less important to China's economy, the switch to a focus on consumption remains patchy.

"The export sector is not going to be playing a major role in driving Chinese growth. The Chinese economy has rebalanced from export-led to domestic-led. The thing is domestic-led still is investment and the switch to consumption has to be done and that is the difficult part," Chi said.