China's weak trade data dashes hopes for rebound
Beijing urges stronger resolve in streamlining or shutting down loss-making state firms as data reveals sustained decline in imports and exports
The mainland's latest trade data has dashed hopes that stronger exports and imports would help revive the sputtering economy, prompting greater calls to streamline the country's sluggish state-owned firms.
The disappointing data came as party leaders urged resolve in going through with SOE reforms and the shutting down of underperforming enterprises, ahead of a key meeting to outline a new roadmap for China's economy.
Exports last month fell 3.7 per cent year on year in US dollar terms, the General Administration of Customs said yesterday. Though an improvement from August's 5.5 per cent fall, it was likely the result of one-off factors like the yuan devaluation. Imports fell more dramatically year on year - by 20.4 per cent, compared with August's 13.8 per cent.
READ MORE: China imports tumble 20 per cent amid fears over nation's slowing economy
Hong Kong stocks slid slightly after the release of the data in the morning, with the weak sentiment persisting for the rest of the day. The Hang Seng Index ended down 0.57 per cent at 22,600.46.
On the mainland, the benchmark Shanghai Composite Index traded in the red for much of the session but managed to close in positive territory, ending up 0.17 per cent at 3,293.23.
Beijing has vowed to reduce reliance on exports while seeking stronger imports and domestic demand. But last month's import weakness "indicated domestic demand had yet to improve", according to a China Merchants Securities research note.
The latest trade data does not bode well for data on the third quarter's gross domestic product, due for release on Monday. ANZ forecast third-quarter GDP growth at 6.4 per cent, down from the second quarter's 7 per cent.