China posts $125.6B June trade surplus as growth slows

China recorded a $125.6 billion trade surplus in June while second-quarter GDP grew 4.3% year-on-year and 0.9% quarter-on-quarter, according to official data. Fixed-asset investment and real-estate development investment declined in the first half of the year.

June imports and exports rose 24.2% year-on-year, with exports up 20.8% and imports up 29.4%. Total goods trade in the first half reached 25.47 trillion yuan, a 16.9% increase from a year earlier, and exports for the period were up 13.4%.

Mechanical and electrical products increased 20.1% and accounted for 63.5% of total goods trade in the first half. Private enterprises made up 57% of total trade. Trade with Belt and Road partners rose 14.8% in the period.

Domestic demand indicators weakened in the first half. Fixed-asset investment fell 5.7%, infrastructure investment declined 2.4% and manufacturing investment fell 1.2%. Real-estate development investment dropped 18.0% and private investment fell 8.5%.

Retail sales rose 1.3% in the first half. Floor space sold decreased 11.6% and the value of newly built commercial property sales fell 13.6%.

Investment in high-tech industries increased 4.6% in the first half, with notable gains in aerospace equipment manufacturing, computer and office device manufacturing, and information services.

Chinese authorities have discussed policy options including more investment-led stimulus, direct support for households through transfers or subsidies, or allowing slower growth while addressing local government finances. Officials have not specified which approach will be adopted.

Markets are awaiting guidance at a Politburo meeting scheduled for late July. Premier Li Qiang has called for stronger counter-cyclical adjustment, and officials have not detailed whether any near-term support will target industrial stimulus or household relief.