China’s slowing economy received a shot-in-the-arm from faster export growth in September, with external demand spilling over to boost imports for processing and re-shipment of goods such as the iPhone 6.
Exports increased 15.3 percent from a year earlier, the biggest increase since February 2013 and beating the 12 percent median estimate in a Bloomberg survey of analysts. Imports rose 7 percent, against projections for a 2 percent decline, leaving a trade surplus of about $31 billion, data from the Beijing-based customs administration today showed.
Export demand is helping China weather a property slump even as the global outlook is becoming more clouded, with Federal Reserve
officials highlighting mounting concern about the improving U.S. economy’s ability to withstand foreign weakness. Imports for processing and re-export surged.
“Import growth in September is heavily driven by external demand and the processing trade industry, instead of domestic demand,” said Le Xia, Chief Asia Economist at Banco Bilbao Vizcaya Argentaria SA in Hong Kong, with iPhone production one component of that. “China’s economy at the current stage is still kind of externally demand driven.”
Chinese stocks maintained declines after the data. The Shanghai Composite Index (SHCOMP) was 0.7 percent lower while Hong Kong’s Hang Seng Index was down 0.4 percent at 1:25 p.m. local time.
A truck carrying shipping containers drives near containers stacked at the Yangshan... Read More
‘Export Growth’
The increase in exports follows a previously reported 9.4 percent jump in August and compares with analysts’ estimates for gains ranging from 7.7 percent to 16.6 percent. The surge was boosted by weakness in the year-earlier period, when shipments fell 0.3 percent, according to previously reported data.Apple Inc.’s new version of the iPhone may boost China’s exports by about 1 percent a month for the rest of 2014, Bank of America Corp. economists led by Lu Ting in Hong Kong said in a note last month.
Exports to Hong Kong surged 34 percent from a year earlier, with the territory overtaking the U.S. in the month to be the top destination for Chinese shipments. That coincided with renewed appreciation of China’s currency, triggering “concerns that speculative trade flows to ride on RMB appreciation could have reemerged,” economists led by Liu Li-Gang at Australia & New Zealand Banking Group Ltd. wrote.
Central bank Governor Zhou Xiaochuan said over the weekend that the economy “will... Read More
Hong Kong
“The trade development between Hong Kong and Mainland China needs to be closely monitored,” ANZ’s economists said.A discrepancy between Hong Kong data for imports from China and Chinese figures for exports to the city in early 2013 highlighted the practice of over-invoicing that inflated China’s export data. Inflated invoices had been used to disguise capital inflows to bet on China’s rising currency.
Analysts forecast China’s expansion this year will moderate to 7.3 percent, the slowest since 1990, and to 7 percent in 2015.
Central bank Governor Zhou Xiaochuan said over the weekend that the economy “will continue to expand at a steady pace.” While expediting spending, boosting infrastructure building and relaxing property curbs, Premier Li Keqiang has refrained from broad-based stimulus, saying China prefers reform to boost the economy.
“Today’s data is less good news than it appears,” Louis Kuijs, Royal Bank of Scotland Group Plc’s chief Greater China economist in Hong Kong, said in a note. “It suggests that China’s export growth is holding up. However, the important caveat coming from the breakdown of the import data suggests that demand growth in China’s own economy remains weak.”
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