Sun, Nov 09, 2014 - Page 13 News List

China trade surplus hits US$45.41bn

HIDING THE FACTS:A Shanghai analyst said better-than-expected figures were due to a contraction in growth of imports, but that domestic demand remains weak


China recorded a trade surplus of US$45.41 billion last month, exceeding expectations, customs said yesterday, but weaker export and import growth could be a worrisome sign for the world’s second-largest economy.

The trade surplus expanded 46.3 percent from the same month last year, exceeding market expectations for a US$42.3 billion surplus, according to a survey of 11 economists polled by the Wall Street Journal.

The surplus also widened from the US$31 billion recorded in September, though it was off the record US$49.8 billion for August, previous figures showed.

Exports jumped 11.6 percent year-on-year to US$206.87 billion last month, while imports rose 4.6 percent to US$161.46 billion, customs said.

“The trade surplus was driven by the contraction in growth of imports ... and export growth was not very strong. So the quality of the surplus was not very high,” Bank of Communications (交通銀行) Shanghai-based analyst Liu Xuezhi (劉學智) said.

Growth in exports — a key engine of China’s economy — slowed from a 15.3 percent year-on-year rise in September. Import growth remained weak last month, slowing from a 7 percent gain the previous month.

“Domestic demand is weak,” Liu said. “De-stocking this year has led to consumption of cement, coal, iron ore and other raw materials to decline, making demand for imports weak.”

China’s economy has faltered this year, hit by a deflating property bubble as well as a government crackdown on corruption and weak external demand from Europe.

The Chinese economy grew an annual 7.3 percent in the third quarter, the slowest in more than five years since the depths of the global financial crisis, dipping below the government’s target of around 7.5 percent for all of this year.

Separately, China has agreed to soften its push for a vast new Asia-Pacific free trade agreement in the face of resistance from the US, which is promoting its own regional trade pact, a report said yesterday.

Beijing, which is hosting an annual gathering of Asia-Pacific leaders, has acquiesced to toned-down treatment in a final summit communique on its favored Free Trade Area of the Asia-Pacific (FTAAP), according to the South China Morning Post newspaper.

China’s promotion of the FTAAP — and the narrative of Sino-US rivalry on the issue — had loomed as a major agenda item for the APEC forum meeting.

APEC officials have said the meeting would conclude with a call for a “strategic study” on FTAAP.

However, FTAAP would only be mentioned in an annex to the final communique and would be downgraded from being called a “feasibility” study, with a target date of 2025 also dropped, the newspaper said citing a US official close to the talks.

It quoted an unnamed Chinese official calling it a compromise by Beijing.

The US has been trying to secure agreement on a Trans-Pacific Partnership (TPP), a grouping of 12 nations including Japan, Australia, Malaysia and Mexico.

All 12 also belong to the 21-member APEC.

However, the TPP notably excludes China, which is now the world’s second-largest economy following the US, and is increasingly pushing for a greater say in world trade and economic architecture.

Some Chinese analysts have viewed the US-backed TPP as a way to thwart the FTAAP and thus counter Beijing’s growing influence in the region — concerns Washington has dismissed.

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