China's September export growth slower on weak global demand | South China Morning Post
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  • Apr 19, 2015
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China's September export growth slower on weak global demand

Weak export growth in September underscored worries about flagging global demand, with the strong renminbi eroding competitiveness

PUBLISHED : Sunday, 13 October, 2013, 12:00am
UPDATED : Sunday, 13 October, 2013, 5:40am

China's export growth fizzled in September as sales to Southeast Asia tumbled, data showed, a disappointing break to a recent run of indicators that had signalled its economy was gaining strength.

China's exports dropped 0.3 per cent in September from a year earlier, the Customs Administration said yesterday, sharply confounding market expectations for a rise of 6 per cent, and marking the worst performance in three months.

Imports fared better, rising 7.4 per cent in September from a year ago, better than forecasts for a 7 per cent increase, shrinking China's monthly trade surplus to US$15.2 billion. Analysts had expected a trade surplus of US$27.7 billion.

Analysts said weak exports underscored worries about flagging global demand, which may crumble further in coming months - especially in emerging markets - when tighter US monetary policy pushes investors away from developing economies.

The data showed Chinese exports to Southeast Asia, China's fastest-growing export market in the past year, dived to a 17-month low in September. Capital outflows from the region on bets that the US central bank would cut its bond purchases had hit demand, said Louis Kuijs, an economist at RBS in Hong Kong.

"Looking ahead, export data may be quite weak in the coming months," Kuijs said, adding that financial turmoil in several emerging markets had dragged on global demand.

Attention now turns to China's third-quarter gross domestic product data and other figures for September due out this week.

"Developed economies have shown signs of recovery but they are still unstable. The global economic situation is still complicated," said Zheng Yuesheng, a customs office spokesman.

Albeit patchy, the rebound in the global economy helped lift China's total trade growth to 6 per cent in the third quarter, from 4.3 per cent the previous three months, Zheng said.

A breakdown of the data showed exports to Europe - the second-biggest buyer of Chinese goods after the United States - South Korea, Taiwan, and Australia all fell last month. Shipments to Taiwan struck a 17-month low while those to Australia posted their worst growth in three months.

Japan was the lone bright spot, registering growth for Chinese exporters for the first time in eight months. Sales to the US cooled, even though the monthly value of exports were the highest in more than a year.

Liu Li-Gang and Zhou Hao, economists at ANZ Bank, said China's sliding export sales were also a result of the rising yuan.

They said activity was further hurt by the Mid-Autumn festival, which fell in the middle of September this year, reducing the number of working days.

"The strong renminbi has eroded China's export competitiveness," ANZ Bank said in a note. It said China's economic growth may miss market forecasts this year, but predicted 2013 growth would hit 7.6 per cent.

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