China's General Administration of Customs reported on Monday that China's trade surplus narrowed to 416.6 billion yuan ($58.9 billion USD) in August, compared with 442.23 billion yuan ($62.33 billion) in July.
Despite falling on July’s, the August 2020 figure increased more than expected. China's exports rose by 9.5% year-on-year, posting the strongest gain since March 2019, while imports fell short of estimates by 2.1% year-on-year in a sign of weak domestic demand.
August’s rise in Chinese exports came as economies re-opened around the world, and marked the third monthly increase in a row, surpassing the prolonged decline in imports.
Strong exports indicate a faster and more balanced recovery of the Chinese economy, which is recovering from a record decline in the Q1 thanks largely to domestic stimulus measures.
A special survey on manufacturing activity last week showed that Chinese factories reported their first increase in new export orders this year in August as overseas demand slowly recovered. The boom in business also led to further expansion in production, marking the largest gains in nearly a decade.
Tensions between the US and China, already high, are expected to escalate ahead of the US presidential election as China continues to fall short of its pledge to boost its purchases of US goods under a deal launched in February. China's trade surplus with the United States widened to $34.24 billion in August from $ 32.46 billion in July.
Senior trade officials in the US and China reaffirmed their commitment to the Phase 1 trade agreement in a phone call last month. "Both sides see progress and are committed to taking the necessary steps to ensure the success of the agreement," the US Trade Representative's office said.