China trade growth rebounds in September
China's trade grew more strongly than expected in September, easing fears of a deeper slowdown in the world's No. 2 economy.
Exports totalled 1.315 trillion yuan (US$214 billion), up 15.3 per cent from the same month last year, while imports of 1.125 trillion yuan (US$183 billion) were up 6.9 per cent.
Exports had grown 9.4 per cent in August while imports had shrunk for two months running.
China's leaders hope export growth will help support employment while trying to nurture growth based on domestic consumption.
Beijing rolled out limited stimulus measures earlier this year after economic growth in the first three months sagged to 7.4 per cent, the lowest in nearly two years. Growth improved only slightly to 7.5 per cent in the second quarter.
September's trade also improved on a sequential basis, with exports up 2.6 per cent from August and imports expanding by 15.2 per cent.
Exports to the United States grew by 10.8 per cent over the same month last year, by 13.8 per cent to the 10 countries of Southeast Asia, and by 14.9 per cent to the European Union. Shipments to Hong Kong rose by 34 per cent, after declining by 2.1 per cent in August.
However, exports to Japan fell by 5.1 per cent, possibly showing the impact of recent weakness in the yen and Japan's economic slowdown following a sales tax hike.
Economist Julian Evans-Pritchard of Capital Economics said the strong import growth likely reflected a temporary increase in demand for overseas components to be processed and re-exported, rather than increased domestic consumption.
Import demand was especially strong for commodities such as oil, iron oil and steel, although falling prices for those goods ensured that the import value in dollars was little changed.
Evans-Pritchard said commodity demand remains depressed by oversupply in the property market and will likely drag on import growth for some time.
Exports, however, will likely continue to boom as the global economy maintains its steady improvement, he said in a report.
"Looking ahead, we expect exports to remain healthy as global growth continues to recover, largely on the back of improving conditions in the US," he said.
China's trade surplus was US$30.9 billion in September, down from a historical high of US$49.8 billion in August.
Analysts at Barclays said that, based on strengthened exports, they expect slightly stronger growth in the third quarter when new figures are released on October 21, which would continue into the rest of the year.
"With an improving global backdrop and falling inflation, we think exports in Q4 could continue to post double digit growth," they said in a report.
RBS economist Louis Kuijs was less optimistic, saying that sluggish global growth would put the brakes on exports, while demand within China remained flat. He estimated economic growth for the year would be about 7.2 per cent, which is below the government's 7.5 per cent target, and rise to 7.3 per cent next year.
"Today's data is less good news than it appears," Kuijs said in a commentary. "From our monitoring of China's economy, we have not received indications of domestic demand staging a recovery."