BEIJIING (BLOOMBERG) – China’s trade surplus rose to a record as exports grew faster than expected, easing some concerns over waning global demand and providing support for an economy battling sporadic Covid-19 outbreaks and property woes.

The nation’s trade balance climbed to about US$101 billion (S$139.4 billion) in July, surpassing the previous record set in June, according to government figures released on Sunday (Aug 7). This is the highest in data compiled since 1987.

Exports in dollar terms grew 18 per cent from a year earlier, beating economists’ estimates for a 14.1 per cent gain.

“The strong export growth continues to help China’s economy in a difficult year as domestic demand remains sluggish,” said Pinpoint Asset Management chief economist Zhang Zhiwei.

Robust growth boosts confidence in the renminbi exchange rate, which helps deter capital outflows, he added.

China’s imports rose by 2.3 per cent, compared with a 1 per cent gain in June. This was lower than the median estimate for an increase of 4 per cent, indicating weak domestic demand.

Inbound shipments of commodities, including soya beans, natural gas and copper, declined on a monthly basis. But crude imports climbed.

Exports have been an important factor in China’s growth during the pandemic. But rising external uncertainties – including a slowing global economy and high inflation within developed countries – suggest that their contribution to the economy this year will weaken. This complicates the picture for a country that is already under tremendous strain.

China’s economy continued to rebound in July from Covid-19 outbreaks and restrictions as bottlenecks in production and logistics eased further. Still, the recovery remained fragile, weighed down by a slowdown in the property sector, still-weak domestic demand and fresh virus flare-ups.

At a Politburo meeting last month, the authorities said the country should strive for “the best outcome” possible for economic growth in 2022, releasing a statement that did not explicitly refer to the growth target of “around 5.5 per cent”, which economists think is out of reach.

In the same week as that meeting, China’s top leaders told government officials that the goal should serve as guidance rather than a hard target that must be hit, according to people familiar with the matter.