RSS Feed (xml)
customs data showed Wednesday, indicating demand for Chinese goods
was improving and helping the government sustain the recovery. The
better-than-expected data -- which sent stocks up in Shanghai -- was
positive for the world's third-largest economy and may help give the
government impetus to next year start unwinding massive stimulus
measures, said analysts. Exports fell 15.2 percent to 115.9 billion
dollars on-year in September, customs authorities said. It was the
best result since exports fell by 2.8 percent in December as the
global crisis began to set in. In the first nine months of 2009 , the
trade surplus stood at 135.5 billion dollars, down 26 percent
compared with the same period a year ago, the General Administration
of Customs said in a statement on its website. "Today's export
numbers are encouraging and in line with recent PMI (Purchasing
Managers Index) survey data showing improved export orders," said
Brian Jackson, a Hong Kong-based senior strategist at the Royal Bank
of Canada. "Some of the recent US data also point to stronger demand
for China's exports in the months ahead." Jackson said improving
demand for Chinese goods would give the government confidence to start
reining in massive stimulus measures from next year. "Chinese growth
this year has been heavily reliant on government-directed investment,
which is why senior officials have continued to characterise the
recovery as not broadly based or firmly established," Jackson said.
"Stronger external demand will provide an alternative source of
support for growth and provide scope for Beijing to start tightening
policy gradually from early 2010. " China unveiled a
four-trillion-yuan (585- billion- dollar) stimulus package last
November aimed at propping up the export-dependent economy as demand
for Chinese goods plunged amid the deepening global financial crisis.
The massive government-backed investment in infrastructure projects,
combined with very low interest rates, appears to be bearing fruit.
China has said it was on track to achieve its target of eight percent
growth in 2009 after the economy expanded by 6.1 percent in the
first quarter and 7.9 percent in the second quarter. Before the
crisis struck, the country had experienced double-digit annual growth
from 2003 to 2007 and again in the first two quarters of last
year. Su Chang, an economist at Beijing research firm CEB Monitor
Group, said he expected exports in the current quarter to fall by
less than 10 percent compared with the more than 20 percent decline
posted in the third quarter. "(The recovery in foreign demand) would
be sustainable -- at least it can sustain for several quarters," Su
said. But Su noted that the trade figures were helped by the fact
there were more working days in September this year than in 2008 due
to the timing of the National Day holiday. Imports slipped 3.5
percent to 103 billion dollars in September -- the slowest pace of
decline since imports began to fall in November last year. Exports
fell a seasonally adjusted 20.1 percent in September on-year and
imports dropped 11.4 percent. Moody's Economy.com associate economist
Nikhilesh Bhattacharyya said the pick up in imports was being driven
by stockpiling. "Commodity stockpiling appears to have been the major
factor behind the improvement in imports, reflected by a record
amount of iron ore imports during September," Bhattacharyya said.
