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China economy on track, June trade surplus jumps

BEIJING -- China's monthly trade surplus jumped 16.4 percent in June to US$31.6 billion, official data showed Thursday, as exports and imports both rose in the latest sign of recovering strength in the world's second-largest economy.

Exports increased 7.2 percent to US$186.8 billion year-on-year, the General Administration of Customs announced, while imports gained 5.5 percent to US$155.2 billion.

China is the world's biggest trading nation in goods.

The latest data came with worries over its growth outlook easing following a series of strong indicators in the second quarter, such as industrial production, retail sales and purchasing managers' index (PMI) surveys.

Gross domestic product (GDP) grew 7.4 percent in the first three months of 2014, weaker than the 7.7 percent in October-December last year and the worst since a similar 7.4 percent expansion in the third quarter of 2012.

Customs spokesman Zheng Yuesheng attributed the trade improvement in the second quarter to factors including supportive government policies and a wider global economic recovery.

“We expect the pace of growth in trade will be faster in the third quarter than in the second quarter,” he told reporters.

“The stabilization and recovery trend in trade will further consolidate.”

China has since April introduced steps to boost growth, including tax breaks for small enterprises, targeted infrastructure outlays and incentives to encourage lending in rural areas and to small companies, measures dubbed “mini-stimulus” by economists.

“Improving trade figures, plus the encouraging PMI data, point out that China's growth will likely pick up somewhat in Q2 due to the targeted 'mini stimulus' measures,” ANZ Bank economists Liu Li-Gang and Zhou Hao wrote in a report.

“We believe that China will achieve 7.5 percent growth in Q2.”

China announces second-quarter GDP results on July 16.

June's trade surplus fell short of the median forecast of US$36.9 billion in a survey of 21 economists by The Wall Street Journal.

Exports, which accelerated slightly from May's gain of 7.0 percent, fell well short of the median prediction of a 10.0 percent rise.

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