(Yicai) Aug. 8 -- China's exports rose more than expected in July as firms rushed to ship goods ahead of escalating US tariffs and increasingly moved production overseas to avoid rising trade barriers.

China’s foreign trade increased 6.7 percent from a year earlier last month, with exports jumping 8 percent and imports climbing 4.8 percent, marking a second straight month of import growth, according to data released by the General Administration of Customs yesterday.

In the first seven months of the year, China’s total goods trade reached CNY25.7 trillion (USD3.6 trillion), up 3.5 percent from a year earlier, per customs data. Exports grew 7.3 percent while imports fell 1.6 percent.

The export growth exceeded expectations largely due to rising shipments to markets outside the United States amid looming new tariffs. The Donald Trump administration's 90-day delay on higher tariffs for China-made goods expires Aug. 12. Moreover, the US president yesterday imposed “reciprocal tariffs” of between 10 percent and 41 percent on multiple countries and regions, along with a 40 percent “transshipment tax” targeting goods routed through third countries.

Feng Lin, executive director of macro research and development at Golden Credit Rating International, said China’s export momentum is likely to weaken this month as the tariff pressure mounts. Feng called for additional policies to stabilize growth and foreign trade in the fourth quarter, including targeted financial support for struggling exporters.

The financial expert noted that Chinese exporters are front-loading orders, a trend mirrored by South Korea and Vietnam, two key global trade bellwethers. Both countries saw accelerated export growth in July, driven by advance orders. As the world’s largest trading nation, China is also seeing manufacturers increasingly shift production abroad in response to the mounting tariff burden on Chinese goods, Feng added.

In July, China’s exports to the European Union rose 9.2 percent, up from June’s 7.5 percent increase. Shipments to South Korea grew 4.6 percent, reversing a previous decline, while exports to Taiwan surged 19.2 percent, compared with a 3.4 percent rise in June. Exports to the Association of Southeast Asian Nations remained strong, climbing 16.6 percent. These increases helped offset the growing decline in shipments to the US. China’s exports to the US fell 21.7 percent in July from a year earlier, widening from a 16.2 percent drop in June, Feng noted.

The changing policies are prompting manufacturers to localize production. A manager at an international freight forwarding company told Yicai that they had completely stopped transshipping goods via Vietnam since the US tariff spat began, as local authorities tightened enforcement against such practices.

Many Chinese firms are waiting for greater clarity on US trade policy before adjusting long-term capacity plans, the same manager said. “The goal is to produce in Vietnam and export globally, rather than just doing simple packaging and assembly to circumvent tariffs.”

Editor: Emmi Laine