Photo: A truck driver moves containers at the container port in in Qingdao in east China's Shandong province. China's Customs Administration reported Monday, Oct. 13, 2014 that trade improved in September, possibly easing fears of a deeper slowdown in the world's No. 2 economy.
BEIJING — China's trade grew more strongly than expected in September, easing fears of a deeper slowdown in the world's No. 2 economy.
Exports totaled 1.315 trillion yuan ($214 billion), up 15.3 percent from the same month last year, while imports of 1.125 trillion ($183 billion) were up 6.9 percent. Exports had grown 9.4 percent in August while imports had shrunk for two months running.
China's communist leaders hope export growth will help support employment while trying to nurture growth based on domestic consumption. Beijing rolled out limited stimulus measures earlier this year after economic growth in the first three months sagged to 7.4 percent, the lowest in nearly two years. Growth improved only slightly to 7.5 percent in the second quarter.
September's trade also improved on a sequential basis, with exports up 2.6 percent from August and imports expanding by 15.2 percent. Exports to the U.S. grew by 10.8 percent over the same month last year, by 13.8 percent to the 10 countries of Southeast Asia, and by 14.9 percent to the European Union. Shipments to Hong Kong rose by 34 percent, after declining by 2.1 percent in August.
However exports to Japan fell by 5.1 percent, possibly showing the impact of recent weakness in the yen and Japan's economic slowdown following a sales tax hike. Economist Julian Evans-Pritchard of Capital Economics said the strong import growth likely reflected a temporary increase in demand for overseas components to be processed and re-exported, rather than increased domestic consumption.
Import demand was especially strong for commodities such as oil, iron oil and steel, although falling prices for those goods ensured that the import value in dollars was little changed. Evans-Pritchard said commodity demand remains depressed by oversupply in the property market and will likely drag on import growth for some time.
Exports, however, will likely continue to boom as the global economy maintains its steady improvement, he said in a report. "Looking ahead, we expect exports to remain healthy as global growth continues to recover, largely on the back of improving conditions in the U.S.," he said.
China's trade surplus was $30.9 billion in September, down from a historical high of $49.8 billion in August. Analysts at Barclays said that, based on strengthened exports, they expect slightly stronger growth in the third quarter when new figures are released on Oct. 21, which would continue into the rest of the year.
"With an improving global backdrop and falling inflation, we think exports in Q4 could continue to post double digit growth," they said in a report. RBS economist Louis Kuijs was less optimistic, saying that sluggish global growth would put the brakes on exports, while demand within China remained flat. He estimated economic growth for the year would be about 7.2 percent, which is below the government's 7.5 percent target, and rise to 7.3 percent next year.
"Today's data is less good news than it appears," Kuijs said in a commentary. "From our monitoring of China's economy, we have not receiveddications of domestic demand staging a recovery."
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