China's imports, exports surge

BEIJING • China's imports grew at their fastest pace this year last month, while exports extended strong gains as more trading partners lifted coronavirus restrictions in a further boost to the world's second-biggest economy.

Exports last month rose 9.9 per cent from a year earlier, Customs data showed yesterday, broadly in line with analysts' expectations and up from a solid 9.5 per cent increase in August.

The strong trade performance suggests Chinese exporters are making a brisk recovery from the coronavirus pandemic's impact on overseas orders. As the global economy restarts, Chinese firms are rushing to grab market share as their rivals grapple with reduced manufacturing capacity.

"A jump in imports suggests that domestic investment spending remains strong," Capital Economics senior China economist Julian Evans-Pritchard said. "Meanwhile, exports remained strong, most likely thanks to the recent strength of retail sales among China's major trading partners."

But some analysts warn that exports could peak soon as demand for Chinese-made protective gear recedes and the base effect of this year's massive declines wears off. Imports surged 13.2 per cent, returning to growth from a fall of 2.1 per cent in August and much stronger than expectations for a 0.3 per cent increase.

Zhongyuan Bank chief economist Wang Jun said the data showed government support for the economy has kicked in as the pandemic comes under control. "This has boosted domestic demand, especially investment-led demand, which buoyed imports," Mr Wang said. "The other factor is the yuan's recent appreciation, which is good for imports and people's spending power."

The rise in imports pushed the trade surplus for last month down to US$37 billion (S$50.3 billion), compared with US$58.93 billion in August and lower than an expected US$58 billion.

Already heightened US-China tensions are expected to escalate ahead of the US presidential election. China remains well behind on its pledge to boost purchases of US goods under an agreement that was launched in February.

China's trade surplus with the United States narrowed to US$30.75 billion last month from US$34.24 billion in August.

Top US and Chinese trade officials reaffirmed their commitment to a phase one trade deal in a phone call in August. However, US Agriculture Secretary Sonny Perdue cast doubt earlier this month on the likelihood of China meeting its commitment to purchase enough agricultural products as promised in its phase one trade deal.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 14, 2020, with the headline 'China's imports, exports surge'. Subscribe