China’s Sept exports surprisingly robust despite power crunch

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BEIJING (Businesshala) – China’s export growth unexpectedly accelerated in September, as still solid global demand took some pressure off factories from power shortages, supply constraints 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

The world’s second-largest economy has made an impressive comeback from the pandemic, but there are signs the recovery is losing steam. Resilient exports can provide a buffer against growing adverse conditions, including weak factory activity, persistent soft consumption and a slowing asset sector.

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Outbound shipments in September jumped 28.1% from a year earlier, up from 25.6% in August. Analysts polled by Businesshala had predicted the growth rate would drop to 21%.

“Exports have continued to outperform and accelerate even after excluding the impact of base effects,” said Erin Xin, Greater China economist at HSBC. in export.

Other analysts said power rationing in September has yet to impact exports, but could disrupt production and drive up costs for Chinese manufacturers in the coming months.

Changes to clean energy, strong industrial demand and high commodity prices due to power shortages have halted production at many factories since late September, including several supply firms such as Apple and Tesla.

In the eastern provinces of Guangdong and Zhejiang, both major export powerhouses, have been told to stagger their production throughout the week, as many owners complained about the chaos that restrictions have brought to work schedules.

Previously, factories could operate at night, but now there is a 24-hour restriction on rationing days, said Qing Lau, who helps manage a metal-coating factory in the export city of Dongguan. The factory was asked to stop using government electricity for three working days this week.

However, Louis Kuijs, Head of Asia Economics at Oxford Economics, is optimistic that the export outlook in the coming quarters will remain solid, despite an unfavorable near-term.

“We generally expect these disruptions to ease over the coming months, as we expect senior policymakers to push growth and call for the pursuit of climate targets at a more measured time.”

“Going forward, we think exports should be gradually eased into the ongoing global economic recovery and global supply-chain disruptions over the next year.”

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.

In addition, the property sector, a key driver of growth, is grappling with rising defaults from Chinese developers, declining real estate sales and new construction beginning to slow.

import slow

China’s September imports rose 17.6%, a 20% gain expected in a Businesshala poll and a 33.1% increase from the previous month.

“The breakdown showed a broad-based decline across all good types, although it was particularly evident for inbound shipments of semiconductors,” said Julian Evans-Pritchard, senior China economist at Capital Economics.

“Low import volumes of industrial metals provide evidence that environmental restrictions and cooling construction activity are weighing heavily on heavy industry.”

However, China’s energy demand is growing rapidly.

Coal import volumes hit their highest level this year in September as power plants scramble for fuel to boost power generation to ease power shortages and replenish inventory ahead of the winter heating season Of.

Natural gas imports in September also reached their highest level since January this year.

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.

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.

Additional reporting by Colin Kian; Editing by Jacqueline Wong


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