China's 9.9pc export growth eases fears of sharper global downturn
A 9.9pc rise in exports from China last month has lowered fears of a sharper global downturn, though economists warn increase may not last
China's exports grew more than expected in September, temporarily easing worries of a sharper downturn in the global economy, though analysts warned the pickup might not be sustainable.
Exports totalled US$186.35 billion last month, up 9.9 per cent year on year, figures from the General Administration of Customs yesterday showed. The growth was higher than the 5.5 per cent median estimate tipped by Bloomberg and the 4.5 per cent predicted by HSBC. Exports only grew 2.7 per cent year-on-year in August.
HSBC analysts Sun Junwei and Qu Hongbin said September's exports rebound was probably due to the increase of Christmas orders and the front-loading of shipments before the eight-day-long National Day holiday, which lasted from September 30 to October 7.
While the stronger-than-expected rebound could help alleviate concerns of a sharper slowdown in the Chinese economy, the analysts said it was unlikely this growth would be sustained in the coming months.
Sun and Qu said Europe remains in a recession, and the United States is faced with the risk of the "fiscal cliff", when automatic tax rises and budget cuts will take effect unless Congress and the administration strike a debt-reduction deal, while QE3, the Federal Reserve's third round of quantitative easing, will have limited impact on GDP growth. "The recent deterioration of new orders in the region's most cyclical sensitive markets, such as Korea and Taiwan, signals a bumpy road ahead," they said.
On the import side, the figures were in line with market expectations, recording moderate growth of 2.4 per cent year on year in September after a contraction of 2.6 per cent in August. The trade surplus rose slightly to US$27.7 billion last month from US$26.7 billion in August.
At Bank of America Merrill Lynch, economists Ting Lu and Marcella Chow said: "Markets will surely welcome these robust trade data, which could further dispel the fear of a hard landing, though positive impact could be partially offset by reduced hope of policy easing. Investors, like us, will also doubt whether the high export growth is sustainable."
Lu and Chow said the strong exports data could be partly driven by the appreciation of the euro, the timing of the mid-autumn holiday and the low base for comparison. Therefore, they said, they remained cautious, though they saw a chance of export growth stabilising in the near term.