China’s exports and imports unexpectedly accelerated last month in an encouraging sign for the world’s second-biggest economy, although analysts expect growth to continue cooling amid a government crackdown on financial risks and polluting factories.
Exports rose 12.3 percent year-on-year, the fastest pace in eight months, led by strong sales of electronics and high-tech goods, while commodity purchases helped lift imports.
The number beat analysts’ forecast of a 5.0 percent increase and compared with 6.9 percent growth in October.
IMPORTS
Imports grew 17.7 percent year-on-year last month, the Chinese General Administration of Customs said yesterday.
That is also well above expectations of 11.3 percent growth and rising at the fastest pace since September.
“While we still expect China’s domestic economy to cool in 2018 on gradually tighter financial policies, the November import data shows that there are upside risks to our China outlook,” said Louis Kuijs, head of Asia Economics at Oxford Economics in Hong Kong.
Tighter rules to rein in risks from a rapid build-up in debt and to cut pollution have weighed on overall activity since the third quarter.
REGULATION
Besides ramped-up efforts to reduce winter pollution, authorities last month unveiled fresh regulatory measures for the financial sector, clamping down on high-risk lending and halting some dubious infrastructure projects that would swell local governments’ debt.
While the war on pollution had been expected to reduce raw materials imports, yesterday’s trade numbers showed that commodity imports rebounded last month.
Natural gas imports rose to a record, crude imports were the second-highest ever and iron ore imports also rose, even as steel mills are cutting output.
The rebound in imports come as the Chinese yuan has fallen 2.8 percent against the US dollar since hitting this year’s peak on Sept. 8.
The latest data showed that the country posted a trade surplus of US$40.21 billion for the month versus expectations for US$35 billion after October’s US$38.185 billion.
Despite the overall strength of the data, imports could come under pressure as China’s economy cools, analysts said.
“Chinese trade looks to have been surprisingly strong last month. We expect exports to continue to perform well in the coming months on the back of strong global demand,” Capital Economics China economist Julian Evans-Pritchard wrote in a note.
“However, we are skeptical that the strength of imports can be sustained given that the delayed impact of policy tightening and a cooling property market are set to weigh on Chinese demand for commodities in coming quarters,” he wrote.
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