China reported surprisingly strong trade figures today, providing fresh evidence that the world's third-largest economy is firmly on a recovery track and that global demand is improving too.
Exports in September fell 15.2 per cent from a year earlier, beating forecasts of a 21 per cent fall, while imports fell just 3.5 per cent -- well short of expectations of a 15.3 percent decline, the General Administration of Customs said.
After adjustments to take account of the number of working days in each month, exports rose 6.3 per cent in September from August and imports rose 8.3 per cent, Customs said.
With imports showing strength, China's trade surplus fell to $12.9 billion last month from $15.7 billion in August. Markets had expected a figure of $17.0 billion.
Economists expect the year-on-year readings in exports to keep improving. Trade slumped after a shock to confidence from the collapse of investment bank Lehman Brothers in September 2008, creating an increasingly favourable statistical base of comparison as 2009 wears on.
Commodities were a driving force behind the sharp improvement in imports. China bought a record 64.55 million tonnes of iron ore in September, up 30 per cent from August; imports of copper rose 23 per cent, propelling Shanghai's benchmark copper futures contract to a 0.5 per cent gain.
Annual economic growth probably accelerated to 8.9 percent in the third quarter, from 7.9 per cent in the second, according to economists polled by Reuters. The figures are due on October 22nd.
The Shanghai stock market halved its gains to end up 1.17 per cent, a four-week closing high, while currency traders started building in expectations of renewed appreciation in the yuan.
China halted the currency's three-year climb against the dollar in July 2008 to protect the country's vast export sector.
But economists say that Beijing will eventually want to let the yuan resume its rise to boost domestic demand and so help rebalance both the Chinese and the global economies -- a key aim of the Group of 20 forum, where Beijing is an influential voice.
Reuters