- China's imports last month surged 7.2% year-over-year, more than doubling analysts' expectations.
- The increase was fueled by high numbers of ADP machine and electronic IC imports.
China's imports last month surged 7.2% from a year ago, surging past analysts' expectations of 3.2% growth.
The surprisingly high increase was partly due to weak numbers from last July, but mainly stems from an especially strong influx of tech products.
Hi-tech products grew over 12% year-over-year in July, compared to under 7% in June. China's ramp up in tech imports is likely in preparation for possible trade regulations, analysts from Bank of America said on Thursday.
"We think the upside surprise in imports was likely more of a reflection of tech-stockpiling ahead of potential trade restrictions rather than a turnaround in domestic demand," the analysts said in a Wednesday note.
Last month, President Joe Biden's administration was reportedly considering tighter restrictions on China's access to US chip products, with a rule that would target chip machinery companies like TSMC and ASML that use American-made tech.
China's chip business depends on those companies to make chips, especially after the US blocked China from importing advanced Nvidia chips in 2022.
Meanwhile, domestic demand in China remains weak, as signaled last week by the Chinese Communist Party's latest Politburo meeting.
"The meeting stressed that it is necessary to focus on boosting consumption to expand domestic demand," China's official Xinhua news agency said.
China's exports, meanwhile, increased by 7% from the same period last year, falling short of analyst estimates of 9.5% but continuing a three-month streak of steady growth.
"Today's data reaffirms our view that exports remain a relative bright spot in the economy and will likely continue to be a key growth driver for the remainder of the year," the Bofa analysts said.
Biden has introduced several tariffs on Chinese imports in the last few months, including a 100% tariff on electric vehicles from the country, as he aims to boost American manufacturing and job growth. The duties amount to $18 billion in tariffs on Chinese goods.