China’s trade surplus grows by 2.2%
Print Edition
CHINA’S exports in September improved from August but remained in negative territory, as imports continued to head south, suggesting sluggish domestic demand and increased economic uncertainty.
According to figures released yesterday by the General Administration of Customs, exports in the month fell 1.1 percent year on year to 1.3 trillion yuan (US$205 billion), following declines of 6.1 percent in August and 8.9 percent in July.
Imports, meanwhile, slumped 17.7 percent in September to 923.9 billion yuan, after sliding 14.3 percent in August, mostly as a result of weak domestic demand and depressed commodity prices.
The combined effect of the two figures meant the trade surplus of the world’s second-largest economy in September rose about 2.2 percent to 376.2 billion yuan.
“Despite stronger-than-expected exports, China’s external demand was weak in the third quarter,” said Liu Ligang, chief China economist at Australia & New Zealand Banking Group.
The improvement in September’s exports was at least partly due to the one-off shipments of new smartphones, he said.
China’s exports in the third quarter fell 5.6 percent year on year, worsening from a 2.9 percent dip in the second quarter, the Customs agency said, adding that exports in the first nine month dropped 1.8 percent.
“What is most worrying is the continued slump in imports,” said Lian Ping, chief economist at Bank of Communications.
“That doesn’t bode well for industrial production and fixed-asset investment, and there are no signs of an imminent recovery,” he said.
Imports fell 14 percent in the third quarter, exactly as they did in the second quarter, resulting in a 15.1 percent drop over the first nine months.
Wang Tao, an economist at UBS, said the September data provided further evidence of the weakness of China’s economy.
“The improvement seen in the second quarter has stalled and the easing policies have yet to filter through,” he said.
China’s economy rose 7 percent in the second quarter, surprising pundits who had forecast an increase of only 6.8 percent.
Since then, however, trade, industrial production, retail sales and fixed-asset investment figures have all moderated, indicating that the recovery might have been short-lived.
ANZ’s Liu said momentum is weak and he expects third-quarter GDP growth — official figures are due out on Monday — to have slipped to 6.4 percent.
Wang said he expects the figure to be 6.6 percent, but even that is below the government’s full-year target of about 7 percent.
“On the bright side, low commodity prices continue to underpin a sharp decline in imports and hence a large trade surplus,” Liu said.
“We predict the total trade balance to be about US$600 billion this year, which will help offset the capital outflows,” he said.
China’s cumulative trade surplus for the first nine months was US$424.1 billion.
“Last month, the pace of decline of China’s forex reserves slowed, indicating that the central bank’s stabilization measures have started to take effect,” Liu said.
“Given the strong trade surplus in the coming months, reserves are unlikely to fall to an alarming level,” he said.
China’s trade in the first three quarters fell 7.9 percent year on year to 17.9 trillion yuan, below the government’s target of about 6 percent growth.
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