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Chinese exports in surprise drop, but imports jump
China's export growth fizzled in September to post a surprise fall as sales to South-East Asia tumbled, data showed, a disappointing break to a recent run of indicators that had signalled its economy gaining strength.
China's exports dropped 0.3 per cent in September from a year earlier, the Customs Administration said on Saturday, sharply confounding market expectations for a rise of 6 per cent, and marking the worst performance in three months.
Imports fared better, rising 7.4 per cent in September from a year ago, better than forecasts for a 7 per cent increase, shrinking China's monthly trade surplus to $US15.2 billion.
Analysts said weak exports underscored worries about flagging global demand, which may crumble further in coming months - especially in emerging markets - when tighter US monetary policy pushes investors away from developing economies.
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Indeed, the data showed Chinese exports to Southeast Asia, China's fastest-growing export market in the past year, dived to a 17-month low in September. Capital outflows from the region on bets that the US central bank will cut its bond purchases had hit demand, said Louis Kuijs, an economist at RBS in Hong Kong.
"Looking ahead, export data may be quite weak in the coming months," Kuijs said, adding that financial turmoil in several emerging markets had dragged on global demand.
The dismal exports performance comes after the world's No. 2 economy showed encouraging signs of stabilisation, having fought a slowdown that lasted in 12 of 14 quarters. Trade, factory production and the services sector all picked up in the past two months.
Attention now turns to China's third-quarter gross domestic product data and other figures for September due next week.
Economic growth is expected to quicken to 7.8 per cent in the third quarter from a year ago, up from 7.5 per cent in the previous three months.
"Developed economies have shown signs of recovery but they are still unstable. The global economic situation is still complicated," Zheng Yuesheng, a spokesman for the customs office, told a media briefing on Saturday.
Albeit patchy, the rebound in the global economy helped lift China's total trade growth to 6 per cent in the third quarter, from 4.3 per cent the previous three months, Zheng said.
A breakdown of the data showed exports to Europe, the second-biggest buyer of Chinese good after the United States, South Korea, Taiwan, and Australia all fell last month. Shipments to Taiwan struck a 17-month low while those to Australia posted their worst growth in three months.
Japan was the lone bright spot, registering growth for Chinese exporters for the first time in eight months. Sales to the United States cooled, even though the monthly value of exports were at their highest in over a year.
Liu Li-Gang and Zhou Hao, economists at ANZ Bank, said China's sliding export sales were also a result of a rising yuan.
They said activity was further hurt by the Mid-Autumn festival, which fell in the middle of September this year, reducing the number of working days in the month compared with 2012.
"The strong renminbi has eroded China's export competitiveness," ANZ Bank said in a note. It said there were risks that China's economic growth may miss market forecasts this year, but predicted 2013 growth would hit 7.6 per cent.
The yuan, which hit a record high of 6.1090 to the dollar on August 12, has gained 5.7 per cent against 60 other currencies since January, data from the Bank of International Settlements showed, outstripping a 3 per cent rise in the dollar.
In the face of China's unsteady economic recovery, Beijing has repeatedly expressed confidence that the country can still achieve its 2013 growth target of 7.5 per cent.
Central Bank Deputy Governor Yi Gang was quoted as saying this week in Washington that China's annual economic growth this year could hit about 7.6 per cent.
Analysts have long warned that a recovery in China's economy may be fragile and brief, especially if Chinese leaders stick to plans for financial reforms, including curbing extravagant investment, which would hurt growth in the near term.
"Despite the subdued export outlook, we expect the government to maintain its current policy stance," said Kuijs from RBS.
"We expect it to hold on to the firmer monetary stance that it is trying to pursue in order to rein in overall credit growth."
"The recent upswing in China's economic activity has significantly boosted import demand for oil and other commodities," said analyst Li Yan at industry website Oilchem.net. "But there are now concerns on whether the recent improvement in the economy is going to fade."
Imports beat expectations
Imports rose 7.4 per cent last month from a year earlier, customs data showed, topping a 7 per cent median. The $US15.2 billion trade surplus compared with a median projection of $US26.25 billion and $US28.5 billion in August.
While imports used for processing and re-export are still not doing very well, those that feed into Chinas own economy continue to grow quite robustly, reflecting a still pretty healthy picture in terms of demand, said Louis Kuijs, chief China economist at Royal Bank of Scotland in Hong Kong.
Chinas daily oil imports climbed to a record last month. Purchases have risen as a result of expansion in the economy and its growing demand for resources, Zheng said.
Iron ore
China, the world's top consumer of iron ore, imported a record 74.58 million tonnes of the steel-making ingredient in September, up eight per cent from August and an increase of 15 per cent on an annual basis, customs data showed.
Imports were driven by robust steel production, with daily runs above 2.14 million tonnes in the first 20 days of September, versus August's daily figure of 2.13 million.
But after a stellar run in the third quarter, imports are expected to weaken through the rest of the year, as steel demand typically falls in the winter, cutting demand for iron ore, said Jin Tao, an analyst with Guotai Junan Futures in Shanghai.
The strength of China's iron ore demand has caught the market by surprise this year, as an unexpectedly buoyant property market has propped up steel demand.
Steel production has gained 7.8 per cent in the first eight months, more than double the growth of 3.8 per cent forecast by analysts in a Reuters poll in July.
Oil
Average imports of crude in September stood at 6.25 million barrels per day (bpd), up 28 per cent on the year and topping the previous record of 6.15 million bpd set in July.
Net imports of 6.23 million bpd show that China overtook the United States in September as the world's biggest net oil importer, a trend which the US Energy Information Administration said would continue through 2014.
In terms of monthly tonnage, September imports of 25.68 million tonnes was the second-highest on record after July, bringing total shipments in the first nine months to 211.3 million tonnes, up 5.4 per cent from a year ago.
Traders have attributed the monthly gain to a slew of large refineries going online after completing scheduled maintenance.
Copper
Copper imports by China, the world's top consumer of the metal, reversed the fall in August and jumped 18 per cent in September, as importers boosted orders ahead of a seasonal pickup.
Imports of anode, refined copper, alloy and semi-finished copper products reached 457,847 tonnes in September, the highest since March 2012 and up 16 per cent from a year ago.
Importers had bought more refined copper to replenish stocks in bonded warehouses, and on expectations of a seasonal pickup in September and October, said Zhou Jie, a trading manager at China International Futures in Shanghai.
Copper stocks in bonded warehouses have fallen about 60 per cent from a record high of around one million tonnes in the year's first quarter, traders estimate.
Total imports of copper in the June-September quarter rose 21.4 per cent over the second quarter to 1.256 million tonnes, data showed.
Soybeans
China, the world's top buyer of soybean, imported 4.70 million tonnes of the oilseed in September, a tumble of 26 per cent from the previous month and a second month of decline as arrivals started to return to normal.
Monthly shipments are levelling off from a surge in second quarter deliveries caused by port-related disruptions.
Still, traders expect soy imports to pick up from November as crushers run at good margins and domestic demand improves.
Imports in the first nine months have risen 3.3 per cent on the year to 45.75 million tonnes, customs data showed, as a fast-growing poultry industry boosts demand for soy meal and planting areas shrink as farmers turn to more profitable crops.
Read more: Chinese exports in surprise drop, but imports jump
China's export growth fizzled in September to post a surprise fall as sales to South-East Asia tumbled, data showed, a disappointing break to a recent run of indicators that had signalled its economy gaining strength.
China's exports dropped 0.3 per cent in September from a year earlier, the Customs Administration said on Saturday, sharply confounding market expectations for a rise of 6 per cent, and marking the worst performance in three months.
Imports fared better, rising 7.4 per cent in September from a year ago, better than forecasts for a 7 per cent increase, shrinking China's monthly trade surplus to $US15.2 billion.
Analysts said weak exports underscored worries about flagging global demand, which may crumble further in coming months - especially in emerging markets - when tighter US monetary policy pushes investors away from developing economies.
Advertisement
Indeed, the data showed Chinese exports to Southeast Asia, China's fastest-growing export market in the past year, dived to a 17-month low in September. Capital outflows from the region on bets that the US central bank will cut its bond purchases had hit demand, said Louis Kuijs, an economist at RBS in Hong Kong.
"Looking ahead, export data may be quite weak in the coming months," Kuijs said, adding that financial turmoil in several emerging markets had dragged on global demand.
The dismal exports performance comes after the world's No. 2 economy showed encouraging signs of stabilisation, having fought a slowdown that lasted in 12 of 14 quarters. Trade, factory production and the services sector all picked up in the past two months.
Attention now turns to China's third-quarter gross domestic product data and other figures for September due next week.
Economic growth is expected to quicken to 7.8 per cent in the third quarter from a year ago, up from 7.5 per cent in the previous three months.
"Developed economies have shown signs of recovery but they are still unstable. The global economic situation is still complicated," Zheng Yuesheng, a spokesman for the customs office, told a media briefing on Saturday.
Albeit patchy, the rebound in the global economy helped lift China's total trade growth to 6 per cent in the third quarter, from 4.3 per cent the previous three months, Zheng said.
A breakdown of the data showed exports to Europe, the second-biggest buyer of Chinese good after the United States, South Korea, Taiwan, and Australia all fell last month. Shipments to Taiwan struck a 17-month low while those to Australia posted their worst growth in three months.
Japan was the lone bright spot, registering growth for Chinese exporters for the first time in eight months. Sales to the United States cooled, even though the monthly value of exports were at their highest in over a year.
Liu Li-Gang and Zhou Hao, economists at ANZ Bank, said China's sliding export sales were also a result of a rising yuan.
They said activity was further hurt by the Mid-Autumn festival, which fell in the middle of September this year, reducing the number of working days in the month compared with 2012.
"The strong renminbi has eroded China's export competitiveness," ANZ Bank said in a note. It said there were risks that China's economic growth may miss market forecasts this year, but predicted 2013 growth would hit 7.6 per cent.
The yuan, which hit a record high of 6.1090 to the dollar on August 12, has gained 5.7 per cent against 60 other currencies since January, data from the Bank of International Settlements showed, outstripping a 3 per cent rise in the dollar.
In the face of China's unsteady economic recovery, Beijing has repeatedly expressed confidence that the country can still achieve its 2013 growth target of 7.5 per cent.
Central Bank Deputy Governor Yi Gang was quoted as saying this week in Washington that China's annual economic growth this year could hit about 7.6 per cent.
Analysts have long warned that a recovery in China's economy may be fragile and brief, especially if Chinese leaders stick to plans for financial reforms, including curbing extravagant investment, which would hurt growth in the near term.
"Despite the subdued export outlook, we expect the government to maintain its current policy stance," said Kuijs from RBS.
"We expect it to hold on to the firmer monetary stance that it is trying to pursue in order to rein in overall credit growth."
"The recent upswing in China's economic activity has significantly boosted import demand for oil and other commodities," said analyst Li Yan at industry website Oilchem.net. "But there are now concerns on whether the recent improvement in the economy is going to fade."
Imports beat expectations
Imports rose 7.4 per cent last month from a year earlier, customs data showed, topping a 7 per cent median. The $US15.2 billion trade surplus compared with a median projection of $US26.25 billion and $US28.5 billion in August.
While imports used for processing and re-export are still not doing very well, those that feed into Chinas own economy continue to grow quite robustly, reflecting a still pretty healthy picture in terms of demand, said Louis Kuijs, chief China economist at Royal Bank of Scotland in Hong Kong.
Chinas daily oil imports climbed to a record last month. Purchases have risen as a result of expansion in the economy and its growing demand for resources, Zheng said.
Iron ore
China, the world's top consumer of iron ore, imported a record 74.58 million tonnes of the steel-making ingredient in September, up eight per cent from August and an increase of 15 per cent on an annual basis, customs data showed.
Imports were driven by robust steel production, with daily runs above 2.14 million tonnes in the first 20 days of September, versus August's daily figure of 2.13 million.
But after a stellar run in the third quarter, imports are expected to weaken through the rest of the year, as steel demand typically falls in the winter, cutting demand for iron ore, said Jin Tao, an analyst with Guotai Junan Futures in Shanghai.
The strength of China's iron ore demand has caught the market by surprise this year, as an unexpectedly buoyant property market has propped up steel demand.
Steel production has gained 7.8 per cent in the first eight months, more than double the growth of 3.8 per cent forecast by analysts in a Reuters poll in July.
Oil
Average imports of crude in September stood at 6.25 million barrels per day (bpd), up 28 per cent on the year and topping the previous record of 6.15 million bpd set in July.
Net imports of 6.23 million bpd show that China overtook the United States in September as the world's biggest net oil importer, a trend which the US Energy Information Administration said would continue through 2014.
In terms of monthly tonnage, September imports of 25.68 million tonnes was the second-highest on record after July, bringing total shipments in the first nine months to 211.3 million tonnes, up 5.4 per cent from a year ago.
Traders have attributed the monthly gain to a slew of large refineries going online after completing scheduled maintenance.
Copper
Copper imports by China, the world's top consumer of the metal, reversed the fall in August and jumped 18 per cent in September, as importers boosted orders ahead of a seasonal pickup.
Imports of anode, refined copper, alloy and semi-finished copper products reached 457,847 tonnes in September, the highest since March 2012 and up 16 per cent from a year ago.
Importers had bought more refined copper to replenish stocks in bonded warehouses, and on expectations of a seasonal pickup in September and October, said Zhou Jie, a trading manager at China International Futures in Shanghai.
Copper stocks in bonded warehouses have fallen about 60 per cent from a record high of around one million tonnes in the year's first quarter, traders estimate.
Total imports of copper in the June-September quarter rose 21.4 per cent over the second quarter to 1.256 million tonnes, data showed.
Soybeans
China, the world's top buyer of soybean, imported 4.70 million tonnes of the oilseed in September, a tumble of 26 per cent from the previous month and a second month of decline as arrivals started to return to normal.
Monthly shipments are levelling off from a surge in second quarter deliveries caused by port-related disruptions.
Still, traders expect soy imports to pick up from November as crushers run at good margins and domestic demand improves.
Imports in the first nine months have risen 3.3 per cent on the year to 45.75 million tonnes, customs data showed, as a fast-growing poultry industry boosts demand for soy meal and planting areas shrink as farmers turn to more profitable crops.
Read more: Chinese exports in surprise drop, but imports jump
