China exports grow in sign of recovery

Published Nov 10, 2012

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Beijing - China's export growth accelerated in October in fresh evidence of a broader rebound for the world's second-largest economy just as the Communist Party grapples with how to boost recovery from a rare slowdown.

Exports rose 11.6 percent in October from a year earlier to $175.6 billion, the national customs bureau said Saturday, strengthening for a second straight month and beating economists' expectations.

Imports, meanwhile, increased 2.4 percent to $143.6 billion, matching September's gain but falling short of analyst forecasts.

The country's trade surplus, a source of friction with countries including the United States, widened to $32 billion for the month, up from $27.7 billion in September.

The size of the surplus was a surprise, surpassing the median forecast of $27 billion in a survey of economists by Dow Jones Newswires.

Those economists had also forecast a 10 percent increase in exports and a 4 percent gain in imports.

China's economic growth has slowed for seven straight quarters and hit a more than three-year low of 7.4 percent in the three months through September, but recent data has fuelled optimism the worst may be over.

Industrial production for October rose 9.6 percent on year from 9.2 percent in September, the government said Friday. Retail sales, the main measure of consumer spending, also accelerated to a 14.5 percent gain during the month.

Fixed-asset investment, a key gauge of infrastructure spending, also showed improvement in October, while inflation remained well under control, dipping to a nearly three-year low of 1.7 percent in October.

Economists have seized on the recent improvement in Chinese data as a sign that economic growth will likely accelerate in the current fourth quarter through the end of December.

“Today's trade data, together with improving domestic demand indicators released yesterday, continue to support our view that China's growth momentum has picked up,” ANZ bank economists Liu Li-Gang and Zhou Hao wrote in a commentary.

The more robust reports come as China's Communist Party is meeting to anoint new leaders for the next 10 years at its 18th congress that began Thursday.

President Hu Jintao, who is expected to be replaced as party leader by Vice President Xi Jinping before the week-long meeting adjourns, called for creating a new growth model with a robust private sector while also insisting on the primacy of the party-led state sector.

He also said China should “promote balanced development of foreign trade” in a speech Thursday to the event, held every five years to trumpet China's political and economic leadership credentials.

Independent economist Andy Xie, based in Shanghai, acknowledged that exports have come off their weakness at the same time last year.

But he added the economy faces strong headwinds given weakness abroad and in domestic demand as shown by tepid import growth.

“I think that in September and in October we had an export-led, small recovery and that recovery is not sustainable because the global economy is very weak,” he said. - Sapa-AFP

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