BEIJING (Reuters) - China’s export growth may have moderated in October after September’s bounce, while imports likely perked up on recovering domestic demand, a Reuters poll showed, underlining tough global headwinds but adding to signs that the world’s No.2 economy is regaining internal strength.
Analysts said milder export growth reflected still anemic external demand, though the upcoming Christmas season in western countries may give a temporary boost to new foreign orders in the final quarter.
“We reiterate our view that China’s export outlook will continue to be grim. The return of export orders was mainly seasonal,” Shen Jianguang, China economist at Mizuho Securities in Hong Kong, said in a recent note to clients.
Concerns about China’s export prospects were mainly due to weak demand from the United States and European countries, China’s two largest trading partners, which take up more than one third of the country’s total exports in 2011.
“South Korea’s export growth in October came in better than expected but demand from the U.S. and the euro area hardly improved at all. Thus the overall picture was one of stabilization rather than a strong rebound in external demand,” said Yao Wei, China economist at Societe Generale in Hong Kong.
The median forecast by 26 economists showed China’s exports in October may have grown 9.0 percent from a year earlier, easing from a rise of 9.9 percent in September, while annual import growth was seen quickening to 3.1 percent on year ago from an increase of 2.4 percent in September.
The monthly trade surplus was estimated at $26.9 billion, narrowing from$27.7 billion in September.
Figures from the just-concluded Canton Fair, China’s largest biannual trade exhibition and an important barometer of export growth, also confirmed flagging global demand, with total transactions this autumn season dropping 9.3 percent from a year earlier.
A pair of factory surveys last week showed China’s new export orders continued to improve in October but remained below the 50-point mark, which demarcates expansion from contracting.
However, China’s commerce ministry recently flagged optimism over the trade outlook, expecting the country’s export recovery in September to last into the fourth quarter, though adding that chances were very low of regaining double digit annual growth rates seen over the past years.
Despite a yet clear-cut trend on export recovery, China’s import outlook seems to be brighter on growing momentum in the domestic economy, analysts said. That can be partially seen from the ending of the destocking cycle and resilient investment demand, they said.
In addition, rising prices in global commodities are also expected to push up the total value of Chinese imports in the final quarter of this year.
Analysts said an anticipated recovery in factory output and domestic consumption could also underpin import growth.
The improving economic activities seen from September data have raised hopes for the Chinese economy to snap out of a seven-quarter long slowdown and head towards a tepid recovery in the fourth quarter.
The Commerce Ministry had set a goal of 10 percent annual growth in combined exports and imports. In the first nine months, China’s exports and imports have grown 6.2 percent, well below the target.
To shield the economy from external uncertainties, Beijing has unveiled a slew of measures to help reduce the burden on exporters and importers, such as urging faster payment of tax rebate, cutting red tape and providing export companies easier access to bank loans.
Reporting by Aileen Wang; Editing by Jacqueline Wong