China exports suffer unexpected decline

‘QUITE MURKY’::One analyst highlighted inflated export data that started late last year, the Mid-Autumn Festival holiday plus currency volatility in Southeast Asia

Bloomberg

Sun, Oct 13, 2013 - Page 13

China’s exports unexpectedly fell last month, limiting any boost from global demand to the nation’s recovery from a two-quarter slowdown.

Overseas shipments dropped 0.3 percent from a year earlier, the General Administration of Customs said in Beijing yesterday, trailing all 46 estimates in a Bloomberg News survey that had a median projection for a 5.5 percent gain. The trade slowdown resulted from a high basis of comparison with last year, the agency said in a statement.

Yesterday’s report may add to Chinese Premier Li Keqiang’s (李克強) challenges in defending the government’s 7.5 percent expansion goal for this year. The IMF cut its global growth outlook this week as capital outflows further weaken emerging markets and warned that a US government default could “seriously damage” the world economy.

“It’s all quite murky,” said Shen Jianguang (沈建光), Hong Kong- based chief Asia economist at Mizuho Securities Asia Ltd, pointing to the impact of inflated export data that started late last year, fewer working days last month due to the timing of the Mid-Autumn Festival holiday and currency volatility in Southeast Asia.

“There has been an export recovery since July to the US and Europe, but it’s been pretty weak,” Shen said. “The driving force for China’s recovery at this stage is still housing and infrastructure investment.”

Imports rose a more-than-projected 7.4 percent, leaving a trade surplus of US$15.2 billion, customs data showed.

Estimates for export growth ranged from 1 percent to 8.2 percent, after August’s 7.2 percent increase. The median forecast for import gains was 7 percent, the same pace as in August. The trade surplus compared with a median projection of US$26.25 billion and August’s US$28.5 billion excess.

Comparing last month’s exports with a year earlier may understate the true picture because of distortions from inflated data last year, analysts at Credit Agricole CIB and Citigroup Inc said.

On a seasonally adjusted basis, exports rose 5.3 percent from a year earlier last month and were up 8.3 percent from August, the administration said.

“Sometimes a single month’s data can’t tell the true story, and there are other factors as well,” Zheng Yuesheng (鄭躍聲), a customs spokesman, said yesterday. “I see this as a seasonal thing.”

An agency survey of about 2,000 exporters showed that overseas shipments “will maintain stable development in the coming two or three months,” based on comments on orders and costs, Zheng said.

The benchmark Shanghai Composite Index of stocks rose 2.5 percent this week, the biggest weekly gain in a month, partly on prospects for reform of Shanghai’s state-owned enterprises.

China’s exports may come under pressure. The IMF said on Tuesday that growth worldwide will be 2.9 percent this year and 3.6 percent next year, compared with July projections of 3.1 percent for this year and 3.8 percent for next year.