China Sept export growth unexpectedly picks up, imports slow

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BEIJING (Businesshala) – China’s export growth was faster than expected in September, as solid global demand offset some pressure on factories from power outages and a resurgence of domestic COVID-19 cases.

FILE PHOTO: A worker carrying a container at a logistics center near the port of Tianjin in Tianjin, China December 12, 2019. Businesshala / Yili Sun / File photo

China’s exports grew 28.1% in September compared to a year ago, from 25.6% in August. Analysts polled by Businesshala had predicted the growth rate would drop to 21%.

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The world’s second-largest economy staged a strong rebound from the COVID-19 pandemic, but there are signs the recovery is losing steam. New problems, including high raw material demand and supply constraints, have clouded China’s economic outlook.

The transition to clean energy, strong industrial demand and high commodity prices due to power shortages have halted production at many factories, including many supplying companies such as Apple and Tesla.

Recent data has pointed to a slowdown in production activity. China’s manufacturing PMI unexpectedly shrank in September as industrial companies battled rising costs and power rationing.

Imports rose 17.6%, a 20% increase expected in a Businesshala poll and compared to a 33.1% increase in the previous month.

China posted a trade surplus of $66.76 billion in September, compared to a surplus of $46.8 billion in August and the survey estimated for a surplus of $58.34 billion.

Many analysts are expecting the central bank to give more incentives to help small and medium-sized enterprises by cutting the amount of liquidity banks have in the form of reserves later this year.

The coronavirus outbreak in China is largely driven by the more contagious Delta variant, but analysts say the country’s “zero-tolerance” COVID-19 policy and expanded international shipping capacity may be hampered.

China’s trade surplus with the United States rose to $42 billion, up from $37.68 billion in August, Businesshala calculated based on customs data.

Last week, top trade officials from the United States and China reviewed the implementation of the US-China economic and trade agreement.

The United States is pressing China to meet its commitments under a ‘Phase 1’ trade deal that has eased the long-running tariff war between the world’s two largest economies. The Phase 1 deal is due to expire at the end of 2021.

Reporting by Colin Qian, Stella Qiu and Gabriel Crossley; Editing by Jacqueline Wong

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