China’s exports fell less than expected last month, with monthly figures even showing signs of a mild recovery over the summer, but a hefty drop in imports might keep pressure on policymakers to do more to stave off a sharper economic slowdown.
Exports fell 3.7 percent from the same period last year, less than a drop of 6.3 percent forecast by economists in a Reuters poll and a 5.5 percent decline in August.
However, imports by value tumbled for the 11th straight month, losing more than 20 percent year-on-year last month due to weak commodity prices and soft domestic demand, which would continue to complicate Beijing’s efforts to stave off deflation.
Highlighting persistent weakness in demand at home and abroad, China’s combined exports and imports fell 8.1 percent in the first nine months of the year from the same period last year, well below the full-year official target of 6 percent growth.
“In general, there are no green shoots in this set of data,” Commerzbank Singapore-based senior economist Zhou Hao (周浩) said. “The growth of port throughput volume still remains low.”
However, monthly figures were much more rosy. Exports to every major market except Taiwan rose from August, as did imports.
Capital Economics analyst Julian Evans-Pritchard said that annual export readings might be distorted downward by base effects from the strong export performance at the end of last year, which many suspected was due to yuan speculation disguised as trade.
He suggested paying closer attention to monthly trends, which show a steady rise to most major export markets in the US and Europe over the summer.
“Basically, exports have been doing better since the second quarter, but that recovery trend has been masked on a year-on-year basis because the second half of 2014 was so strong,” he said.
Evans-Pritchard also said that import data had become unreliable given massive swings in prices due to the commodity downturns, and a divergence between prices and trading volumes.
“For the major commodities like oil, copper, etc. we’re actually seeing a pretty healthy trend in import volumes,” he said.
Import volumes are a leading indicator for exports in China, given a large share of materials and parts are re-exported as finished goods.
“September’s import figure does not bode well for industrial production and fixed asset investment,” ANZ economists wrote in a research note reacting to the figures. “Overall growth momentum last month remained weak and Q3 GDP growth to be released next Monday will likely have edged down to 6.4 percent in the third quarter, compared with 7 percent in the first half.”
The country posted a trade surplus of US$60.34 billion last month, China’s General Administration of Customs said yesterday, higher than forecasts of US$46.8 billion.
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