Beijing - China’s trade surplus widened last month to the largest in more than four years as exports exceeded estimates, in a sign that global demand is helping sustain a recovery in the second-biggest economy.
The surplus was $33.8 billion (R349.3bn) as outbound shipments rose 12.7 percent from a year earlier and imports gained 5.3 percent, data from the General Administration of Customs showed on Sunday in Beijing. Consumer prices rose a less-than-estimated 3 percent, a statistics bureau report showed yesterday.
Stronger demand from abroad may give Premier Li Keqiang more room to implement reforms outlined at a Communist Party meeting last month to increase the role of markets and boost domestic consumption for more sustainable growth in the long term.
At the same time, weaker-than-projected inflation and analysts’ forecasts for a fourth-quarter slowdown suggest the economy remains vulnerable.
“There are signs that the global activity and trade cycle is gaining momentum, driven by the recovery in high-income countries,” Louis Kuijs, the chief China economist at Royal Bank of Scotland Group in Hong Kong, said.
“China’s exporters are benefiting from that.”
While Kuijs said imports showed “solid expansion of China’s domestic demand” with prices declining from a year earlier, economist Chang Jian at Barclays said that the inbound shipments “suggest softer domestic demand”.
The Shanghai Composite index fell 0.1 percent at the 11.30am local time break, while the yuan rose to a 20-year high against the dollar yesterday.
The increase in exports topped projections from 41 of 42 analysts surveyed by Bloomberg, while import gains compared with a median projection of 7 percent.
The median estimate for the trade surplus was $21.2bn, after a $31.1bn excess in October.
Overseas shipments rose 5.8 percent from October on a seasonally adjusted basis, compared with a 3.8 percent decline in the previous month, customs data showed on Sunday. Exports to the US rose 17.7 percent year on year, while shipments to the EU were up 18.4 percent.
China’s foreign exchange regulator said at the weekend that it would increase scrutiny of trade financing and that banks should prevent firms from getting financing based on fabricated trade.
The measures were aimed at preventing abnormal foreign exchange flows, the State Administration of Foreign Exchange said at the weekend.
The latest statement follows a crackdown that began in May after trade data were inflated for several months on fake invoicing used to disguise capital inflows.
Kuijs said year-on-year growth figures in exports overstated momentum because shipments were “relatively weak” in November 2012 even amid over-invoicing to disguise capital inflows for the quarter.
Steve Wang, the chief China economist at Reorient Financial Markets, said Sunday’s data did not suggest the figures were inflated because the gains did not come in categories that previously correlated with suspicious practices.
It remained to be seen if the overseas momentum would continue, with a previous purchasing managers’ survey showing new export orders were “not as strong as what people had hoped”, Wang said.
Economic growth may cool to 7.6 percent this quarter after a rebound in the third quarter from a two-quarter slowdown, a survey showed last month.
Elsewhere in Asia, Japan’s growth slowed more than initially estimated in the third quarter and the current account unexpectedly fell into deficit in October. – Bloomberg