China’s export growth accelerated last month, adding to signs of a gradual recovery for the world’s second-largest economy, while import growth weakened.
Exports rose 7.2 percent to US$190.7 billion, accelerating from July’s 5.1 percent growth, customs data showed yesterday. Imports rose 7 percent to US$162.1 billion, but that was down from July’s 10.9 percent.
Stronger sales of Chinese goods abroad are a positive sign for Chinese Communist Party (CCP) leaders who want to avoid job losses in export-driven manufacturing.
China’s economic growth fell to a two-decade low of 7.5 percent in the second quarter, but the latest industrial data suggest the slowdown might be leveling out.
CCP leaders have tried to perk up growth with higher spending on railway construction and tax cuts for small businesses.
However, they have resisted appeals for more stimulus, saying they want to focus instead on reforms to make the economy more efficient and productive.
“The combination of steady growth and muted inflation provides a good environment for the authorities to push forward long-term structural reforms,” UBS economist Tao Wang (王濤) said last week.
Chinese leaders are expected to announce a reform package after a CCP meeting in November, but are rumored to be locked in heated debates over the details.
Much of China’s slowdown over the past three years is due not to global economic malaise, but to CCP leaders’ efforts to shift the basis of growth from exports and investment to more self-sustaining domestic consumption.
Beijing has tightened controls to cool a construction and investment boom.
However, consumer spending is rising more slowly than planned, which has left the country more dependent on exports than Chinese leaders want.
Manufacturing activity expanded last month, but export orders declined due to weak US and European demand.
Factory output, construction and auto sales also have improved in recent months.
The IMF and private sector forecasters have cut their China growth forecast for this year, but to a still robust level of 7.5 percent to 8 percent.
That would be China’s weakest performance since the early 1990s, but is ahead of low single-digit growth forecast for the US, Europe and Japan.
“How strong and how long the recovery will last will depend on the US recovery and the general global environment,” Wang said.