BEIJING (Reuters) – China’s export growth slowed in October but beat forecasts, helped by strong global demand ahead of winter break.
However, imports did not live up to analysts’ expectations, likely pointing to the general weakness in domestic demand.
Exports increased 27.1% in October compared to the previous year, an increase lower than the 28.1% in September. Analysts polled by Reuters predicted growth of 24.5%.
Zhiwei Zhang, chief economist at Pinpoint Asset Management, said strong exports would help mitigate the weakening domestic economy and give the government more leeway in economic policy.
“The government can afford to wait until the end of the year to loosen monetary and fiscal policies now that exports provide a buffer to smooth the economic slowdown,” he said.
Recent data point to a slowdown in manufacturing. Manufacturing activity shrank for a second month in October, an official survey showed, while industrial production growth fell to the lowest since March 2020 – the period of the first wave of the pandemic.
LESS RESTRICTIONS
However, under strong government intervention, some supply constraints have started to ease in recent weeks, including an energy crisis that was triggered by a coal shortage, tighter emission standards and strong industrial demand.
Prime Minister Li Keqiang said on Tuesday that the government would take steps to support the industrial sector as the economy faces new downward pressures.
Imports increased 20.6% in October from a year earlier, accelerating from a 17.6% increase in September, but well below expectations for a 25% increase.
Data from Goldman Sachs showed that the value of crude oil imports grew 56.3% year-over-year, down from 34.9% in September, and the value of coal imports rose 292% year-on-year, further accelerating. more than a 234% gain in September as the global energy crisis and post-Covid economic recovery supported commodity prices.
China posted a trade surplus of $84.54 billion last month, the highest on record. It also came in above the survey’s forecast of 65.55 billion and the surplus of $66.76 billion in September.
The world’s second-largest economy grew 4.9% 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, according to Reuters calculations based on customs data, from $42 billion in September.
US trade representative Katherine Tai last month pledged to exclude some Chinese imports from tariffs, while pressuring Beijing about failing to deliver on some promises made in a “Phase 1” trade deal made under the Trump government.
(Reporting by Albee Zhang, Stella Qiu and Ryan Woo)
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