China's foreign trade upside may put brakes on need for massive stimulus

Surprisingly rapid growth in mainland exports and imports last month has improved the odds for a recovery in the world's second-largest economy in the final quarter of the year, with central bank officials reiterating there is no need to resort to massive stimulus to spur growth.

However, analysts say it is uncertain how quickly domestic demand, especially that related to property investment, will recover, and that will continue to weigh on the mainland's economic growth outlook.

Mainland exports jumped 15.3 per cent year on year last month, accelerating from a rise of 9.4 per cent in August, while imports gained 7 per cent in September after a 2.4 per cent fall the previous month. That resulted in a trade surplus of US$30.9 billion last month, down from a record US$49.8 billion in August.

The trade growth beat market expectations of a 12 per cent rise for exports and a 2 per cent fall for imports.

A 34.6 per cent surge in mainland exports to Hong Kong was attributed to a very low base in September last year, with trade between Hong and the mainland falling 13 per cent in the first three quarters of the year.

The mainland trade performance defied much grimmer trade data from Europe. Germany said last week that its exports in August registered the biggest monthly fall since January 2009.