Upswing in foreign trade fuels optimism
China’s foreign trade could continue its upswing early next year, after both exports and imports posted a surprise pickup in November, according to analysts.
Foreign trade volume increased to 2.35 trillion yuan ($341.5 billion) in November, up by 8.9 percent year-on-year, according to figures released by the General Administration of Customs on Thursday. Exports grew by 5.9 percent year-on-year, and imports by 13 percent.
Analysts said the data signaled that the nation’s foreign trade situation could improve early next year. The decline of exports had gradually narrowed in the past several months before the unexpected turn.
“For the performance early next year, China’s exports would be mainly affected by the United States. It is projected that China’s exports to the US could improve as the market is bullish on the United States’ economic recovery,” said Zhou Mi, a research fellow at the Chinese Academy of International Trade and Economic Cooperation of the Ministry of Commerce.
“Better-than-expected trade data out of China today reflects both an uptick in global demand as well as the continued strength of the domestic economy,” said Julian Evans-Pritchard, an economist at Capital Economics in Singapore, on Thursday.
“Despite today’s positive surprise, the medium-term outlook for Chinese trade remains challenging,” he told Bloomberg.
China’s Export Leading Indicator grew by 1.3 monthon-month to 36.9, suggesting the downward pressure could be reduced early next year, according to the General Administration of Customs.
The index is a monthly barometer to predict China’s export trend for the coming two or three months.
Exports to the European Union, China’s largest trading partner, climbed by 1.5 percent in the first 11 months, while exports to the US declined by 0.9 percent.
Tang Guanyu, chairman of Wuxi ABC Zipper Manufacturer Co, chose to invest 100 million yuan in three factories to enlarge manufacturing ability. He said he expected this will add at least 300 million yuan to the value of output.
“Although I haven’t seen obvious growth on either the overseas or domestic market as the figures showed, I believe it is a great chance to buy manufacturing enterprises that are facing financial constraints but with potential production capability,” said Tang.