China's September export growth slower on weak global demand

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.