China’s imports rise for first time in nearly two years, raising hopes nation’s economy gathering steam
Imports grew 1.5 per cent last month, official figures suggest, after a massive slump in July
China’s imports rose for the first time in nearly two years last month, sending a strong signal that the world’s second-biggest economy is slowly building up steam.
China’s exports, however, fell again in August, but by a smaller margin, indicating that demand overseas for Chinese products is also stabilising.
The numbers released by the General Administration of Customs in Beijing on Thursday, a week after strong figures in an official manufacturing survey, point to a less gloomy outlook for the Chinese economy.
They also make it less urgent for the government to conduct significant monetary easing, or to boost fiscal spending, to shore up slowing economic growth, according to analysts.
Signs that the economy is strengthening in China, still the biggest contributor to global economic growth, could also help lead the world economy out of the current trend of low growth and low inflation.
“The import data is more evidence that China’s domestic demand is strong,” Deng Haiqing, an economist at Jiuzhou Securities wrote in a research note. China’s exports are also turning round thanks to a weaker Chinese currency, he said.
Imports surprisingly rose 1.5 per cent in August, against a 12.5 per cent fall in July. It was the first positive monthly growth since October 2014.
Exports fell 2.8 per cent last month if measured in US dollars compared with the same period a year ago, China customs data showed, narrowing from a drop of 4.4 per cent in July. The nation’s trade surplus narrowed to US$52.05 billion from July’s US$52.3 billion.
China’s exports recovery came as part of a broad improvement in overseas shipments in the North Asia region, along with Japan, South Korea and Taiwan, Louis Kuijs, the head of Asia research at Oxford Economics, wrote in a research note.
While it may not be wise to get “too excited” about export outlook since a weak comparison base last year helped China’s exports growth, the “shared turn-around is welcome anyway”, Kuijs noted.
JP Morgan economists, led by Grace Ng, wrote in a note that China’s strong imports were helped by a price rebound in the commodities crude oil and iron ore as well as a pickup in processing imports ahead of new smartphone launches. Apple unveiled the iPhone 7 series on Wednesday.
But economists said they still need more evidence to see whether such signs of stabilisation are sustainable and convincing enough to assure Beijing to put a hold on more stimulus measures to boost economic growth.
“China’s August trade data beat market expectations on the uptick trend,” said Suan Teck Kin, a senior economist at UOB in Singapore. “We think the data indicated that the deterioration of trade may have reached the bottom, although we still need more evidence to conclude whether such improvement is solid enough to be sustainable.”
Yu Pingkang, chief economist at Changjiang Pension Insurance, a Shanghai-based insurer, said the August trade data alone would not be enough to persuade Beijing to shift from proactive fiscal spending and structural reforms.
In the first eight months of the year, China’s total exports fell 7.1 per cent year-on-year to US$1.35 trillion. Imports are down 9 per cent to US$998 billion.