China’s imports unexpectedly rose last month for the first time in nearly two years, boosted by coal and other commodities, suggesting domestic demand might be picking up and putting the world’s second-largest economy on a more balanced footing.
Exports also showed signs of improvement, falling by a less-than-expected 2.8 percent from the same period last year, as demand in the US, Europe and even Japan showed some signs of improvement, data showed yesterday.
If it proves sustainable, a trade recovery or even signs of stabilization would help ease fears that China’s economy is becoming increasingly lopsided, and give feeble global growth a much-needed shot in the arm.
“The improvement in imports is mostly a reflection of stronger domestic demand. Chinese companies are restocking [raw materials], and also are now expecting prices to start rising,” Capital Securities (群益證券) Beijing-based economist Wang Jianhui (王建輝) said, adding that firmer prices for oil and iron ore also helped the import figures.
“There is also some expectation that the economy is improving. As we are entering the high season in the fourth quarter, we expect exports to stay stable and imports to improve as higher prices spread to more products,” he said.
China’s 1.5 percent import rise was the first expansion in value terms since October 2014. While a surge in commodity prices is widely acknowledged as a major factor for the rebound in imports, analysts believe the surprising uptick also reflected stronger domestic demand, which is fueling a brighter profit outlook for Chinese manufacturers.
“The size of the pick-up suggests that there may also have been some improvement in import volumes last month,” Capital Economics said in a note.
Global demand for Chinese goods also seems to be perking up, although weak US factory activity readings and German output data this week suggest export orders might remain sluggish.
Exports fell 2.8 percent from the same period last year, beating forecasts for a 4 percent decline. Shipments to the US dipped marginally while those to the EU rose 2.4 percent. Exports to Japan also improved, albeit modestly.
the Chinese General Administration of Customs said that pressure on shipments was expected to ease further in the fourth quarter, although analysts doubt there would be any strong recovery soon.
China recorded a narrower trade surplus of US$52.05 billion last month, versus a US$58 billion forecast and July’s US$52.31 billion.
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