Chinese exports surge as global restrictions ease
By Abigail Townsend
Date: Tuesday 13 Oct 2020
(Sharecast News) - China's economy strengthened in September, government data showed on Tuesday, as Covid-19 restrictions around the world eased and both domestic and global demand picked up.
Exports rose by 9.9% year-on-year, largely in line with forecasts for growth of around 10.0%. Imports grew at their fastest pace this year, however, jumping 13.2% compared to August's 2.1% decline. Most analysts had expected a far smaller rise of around 0.4%.
As a result, the overall trade surplus was $37.0bn compared to $58.9bn in August, well below the consensus for $60.0bn. The trade surplus with the US was $30.8bn compared to $34.2bn in August.
Miguel Chanco, senior Asia economist at Pantheon Macroeconomics, said: "The expectations for an uptick in the trade surplus were always on the high side, as the balance had been flattered by seasonal factors, which have provided an average absolute lift of $9bn since May.
"Inbound shipments were slower to recover than exports, but they are now officially back to pre-lockdown levels, implying that the recent upward momentum should start to taper off."
In a note, TD Securities wrote: "China's September trade data revealed another robust outcome. Market consensus for imports was way too low.
"There were signs of progress towards Phase 1 targets, with imports from the US rising 24.7% year-on-year, following a measly 1.8% increase in August, while the share of US imports rose to 6.5% from 6.0% previously. However, progress is still very slow, with imports from the US up only 0.2%.
"The data adds yet more evidence that China's economy is on track for a robust recovery and, along with other data, will likely result in upgrades to growth forecast and reduced impetus for policy stimulus."
SP Angel said the September data "reflect strong growth momentum, driven by a pick-up in imports, pointing to growth in domestic demand as well as accelerating exports on the back of sustained external demand".
Washington and Beijing finally agreed a Phase 1 trade deal in January after months of negotiations, leading to a temporary halt in a bitter trade war between the two countries.
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