China exports tumble 10% in September on weak global demand

A container area is seen at the Yangshan Deep Water Port in Shanghai.
A container area is seen at the Yangshan Deep Water Port in Shanghai.PHOTO: REUTERS

BEIJING (AFP, BLOOMBERG) - China's exports tumbled 10.0 per cent year on year to US$184.5 billion in September, government data showed on Thursday (Oct 13), as anemic global demand weighed on the world's second-largest economy.

Imports fell 1.9 per cent on-year to US$142.5 billion, Customs said, and the trade surplus declined to $42.0 billion.

"There remain obvious obstacles facing China's foreign trade development," Customs spokesman Huang Songping told reporters in Beijing.

Both exports and imports missed expectations, with a Bloomberg News survey of economists forecasting a drop of 3.3 per cent for exports and a 0.6 per cent rise in imports.

China is crucial to the global economy and its performance affects partners from Australia to Zambia, which have been battered by its slowing growth.

"World growth remains sluggish and global trade lacks effective support," Mr Huang said, but added that exporters' confidence was strengthening as China's domestic economy "stabilised and improved".

Lackluster trade data may increase pressure on the yuan at the same time new property curbs challenge the resilience of the nation's economic recovery. Third-quarter growth probably held up at 6.7 per cent for a third straight quarter, according to a Bloomberg survey of economists before the official report due Oct 19.

The data are "consistent with a significant slowdown in global trade volumes," said Sue Trinh, head of Asia foreign exchange strategy at RBC Capital Markets in Hong Kong. "China is running out of options and letting the RMB go is the lowest cost option for them."

For China's central bank, "while the major battle in 2016 is against capital outflows, the one for next year has to be the fight against the depreciation expectations," Larry Hu, the head of China economics at Macquarie Securities Ltd. in Hong Kong, wrote in a report ahead of the data release.

The yuan has dropped 3.4 per cent against the US dollar this year, the biggest decline in Asia, and weakened 6.2 per cent against a 13-currency trade-weighted index. The People's Bank of China on Thursday weakened the daily reference rate for the seventh day in a row, the longest weakening run since January.