China’s export growth slowed in October but beat forecasts as booming global demand for holiday seasons, an easing power crunch and mitigating supply chain disruptions offset some pressures facing the world’s second-largest economy.
Imports, however, missed analysts’ expectations, likely pointing to the overall weakness in domestic demand.
Outbound shipments jumped 27.1 per cent in October from a year earlier, slower than September’s 28.1 per cent gain. Analysts polled by Reuters had forecast growth would ease to 24.5 per cent.
Zhiwei Zhang, chief economist at Pinpoint Asset Management, said the strong exports would help to mitigate the weakening domestic economy, and offer the government with more room to manoeuvre economic policy.
“The government can afford to wait ’til the year end to loosen monetary and fiscal policies, now that exports provide a buffer to smooth the economic slowdown,” he said.
Recent data has pointed to a manufacturing slowdown. Factory activity shrank for a second month in October, an official survey showed, while growth in industrial output eased to the lowest since March 2020 – the first wave of the pandemic.
However, under heavy government intervention, some supply constraints have started to ease in recent weeks. A power crunch – triggered by a shortage of coal, tougher emission standards and strong industrial demand – has started to ease after heavy government intervention.
Premier Li Keqiang said on Tuesday that China’s government will take measures to support the industrial sector as the economy faces renewed downward pressures.
Imports jumped 20.6 per cent in October from a year earlier, accelerating from a 17.6 per cent gain in September but missing the expectations for a rise of 25 per cent.
China’s crude oil imports plunged in October to their lowest since September 2018, while coal imports slowed as domestic production boomed. Purchases of iron ore slipped for a second month on easing demand.
China posted a trade surplus of $84.54 billion last month, above the poll’s forecast of $65.55 billion and September’s $66.76 billion surplus.
The country’s economy grew 4.9 per cent in the July-September quarter from a year earlier, the weakest reading since the third quarter of last year.
China’s trade surplus with the United States was $40.75 billion in October, Reuters calculations based on customs data showed, down from $42 billion in September.
US Trade Representative Katherine Tai pledged last month to exclude some Chinese imports from tariffs while pressing Beijing over its failure to keep some promises made in a “Phase 1” trade deal made under the Trump administration.