BEIJING • China's imports unexpectedly rose last month for the first time in nearly two years, boosted by coal and other commodities, suggesting domestic demand may be picking up and putting the world's second-largest economy on a more balanced footing.
Exports also showed signs of improvement, falling by a less-than-expected 2.8 per cent from a year earlier, as demand in the United States, Europe and Japan posted signs of improvement, data showed yesterday.
If it proves sustainable, a trade recovery or even signs of trade stabilisation would help ease fears that China's economy is becoming increasingly lopsided, and give feeble global growth a shot in the arm. In recent months, China's economy has shown signs of stabilising, but growth has become more dependent on a government infrastructure spending spree and a housing boom as private investment fizzles and exports remain sluggish.
"The improvement in imports is mostly a reflection of stronger domestic demand. Chinese companies are restocking (raw materials), and also are now expecting prices to start rising," said economist Wang Jianhui at Capital Securities in Beijing. "There is also some expectation that the economy is improving. As we are entering the high season in the fourth quarter, we expect exports to stay stable and imports to improve as higher prices spread to more products."
China's 1.5 per cent import rise was the first expansion in value terms since October 2014. While a surge in commodity prices is widely acknowledged as a major factor for the rebound in imports, analysts believe the surprising uptick reflected stronger domestic demand, which is fuelling a brighter profit outlook for Chinese manufacturers. "The size of the pick-up suggests that there may also have been some improvement in import volumes last month," Capital Economics said in a note.
The launch of new electronic gadgets ahead of the year-end shopping season may also have given a boost to China's supply chain.
Global demand for Chinese goods also seems to be picking up slowly, though weak US factory activity readings and German output data this week suggest export orders may remain sluggish.
Exports fell 2.8 per cent from a year earlier. Shipments to the US dipped marginally while those to the European Union rose 2.4 per cent. Exports to Japan also improved, albeit modestly.
China recorded a narrower trade surplus of US$52.05 billion (S$70.1 billion) last month, versus July's US$52.31 billion.