China's exports and production surge

PUBLISHED : Wednesday, 16 October, 2002, 12:00am
UPDATED : Wednesday, 16 October, 2002, 12:00am

China's economy remains in high gear, with official data showing exports and production surged last month, confirming the mainland's status as one of the few engines of global economic growth.

Exports rose 33.1 per cent last month compared with a year earlier, according to the Ministry of Foreign Trade and Economic Co-operation, while industrial production rose 13.8 per cent.

The growth came amid weak international demand and followed mainland export growth of 28 per cent and 25 per cent in July and August. 'What makes the numbers in China strong is that every Asian exporter is slowing,' said Dick Li, Greater China economist at Goldman Sachs. 'Global leading indicators like the OECD [Organisation for Economic Co-operation and Development] indicator are falling but China exports are picking up.'

The value of goods and commodities made in China and sold abroad reached US$31.9 billion (HK$248 billion) last month, while imports rose 36.4 per cent to US$29.8 billion, the ministry said. Mainland exports have risen 19.4 per cent this year, sharply above official estimates of a seven per cent increase.

'International businesses are flocking to China to take advantage of cheap resources there,' said Prakash Sakpal, an economist at ING Financial Markets.

While warning of the effects of a US invasion of Iraq, Mr Sakpal said: 'We see China as a safe haven from this scenario.'

The industrial output of 282.5 billion yuan (HK$266 billion) reflected a strong export performance and heavy government investment in public works.

Despite heavy demand for consumer goods in the US and Europe, some analysts said China would be vulnerable if the global economic recovery faltered.

'I don't think this export growth is sustainable,' Mr Li said. 'It will slow in the fourth quarter because external demand is slowing. The United States is the major one. There are also increasing signs Euro-land is slowing [and] leading indications Japan is also showing slowing demand.'