China October export growth quickens, imports pace steady

Published November 09, 2012

| Reuters

China's export growth quickened in October and the pace of imports held steady, adding to signs the domestic economy is stabilizing and weakening the case for further policy measures to boost activity.

Customs data showed exports in October rose 11.6 percent from a year earlier, higher than market expectations for a rise of 9 percent and stronger than the 9.9 percent annual increase recorded in September.

Imports rose 2.4 percent year on year in October, below market forecasts for a 3.1 percent increase but maintaining the same pace of growth as September.

The rise in exports was the strongest since May, but some analysts cautioned against thinking a firm recovery in trade is underway.

"I think the October export rebound is mainly due to the delivery of orders for Christmas season," said Wang Han, an analyst at Industrial Securities in Shanghai.

"I would stay cautious about the export outlook in the coming months as demand from the United States and European countries has not fully recovered."

The trade surplus hit $32 billion last month, compared with a forecast of $26.9 billion and compared with $27.7 billion in September.

China's Commerce Minister Chen Deming had flagged the figures on Friday, telling reporters on the sidelines of China's Communist Party congress that exports rose more than 11 percent and imports grew by 2.8 percent. However, he also said it would be difficult for China to hit a 2012 target to grow total trade by 10 percent.

This year's weakening demand for China's exports was reflected in the just-concluded Canton Fair, China's largest biannual trade exhibition, where total transactions this autumn season dropped 9.3 percent from a year earlier.

However, in a sign that the worst may be over, two factory purchasing managers' reports last week showed a contraction in new orders had eased in October.

China's exports generated 31 percent of gross domestic product in 2011, according to World Bank data, and supported an estimated 200 million jobs.

The latest Reuters poll of analysts showed China's economy to have its weakest year of expansion since 1999, though the annual economic growth is likely to accelerate to 7.7 percent in the final quarter from 7.4 percent in the third quarter.

To shield the economy from external uncertainties, Beijing has unveiled a slew of measures to help reduce the burden on exporters and importers, such as urging faster payment of tax rebates, cutting red tape and providing easier access for export companies to bank loans.

The Finance Ministry had also said it would suspend administrative customs fees for all goods coming in and out of China for the rest of this year to cushion the impact from the global economic downturn.

(Reporting by Aileen Wang and Koh Gui Qing)

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