China ex­ports ex­ceed es­ti­mates

The Pak Banker - - Front Page -

BEI­JING

China's ex­ports rose at the fastest pace in five months in Oc­to­ber, adding to signs of a re­bound in the world's sec­ond­biggest econ­omy af­ter in­dus­trial out­put and re­tail sales ex­ceeded fore­casts.

Over­seas ship­ments in­creased 11.6 per­cent from a year ear­lier, the Bei­jing-based cus­toms ad­min­is­tra­tion said in a state­ment yes­ter­day. That com­pared with the 10 per­cent es­ti­mate in a Bloomberg News sur­vey of economists and 9.9 per­cent in Septem­ber. Im­ports rose 2.4 per­cent, the same pace as the pre­vi­ous month. The trade sur­plus widened to $32 bil­lion, the big­gest in al­most four years.

China's tran­si­tion to a new gen­er­a­tion of Com­mu­nist Party lead­ers, which be­gan in Bei­jing last week, may be smoothed by the re­ver­sal of a slow­down that started in last year's first quar­ter. The Septem­ber-Oc­to­ber pickup in ex­port growth shows the econ­omy is start­ing to sta­bi­lize, Com­merce Min­is­ter Chen Dem­ing said yes­ter­day at a briefing in Bei­jing.

"We are still cau­tious, but the ro­bust ex­port growth around 10 per­cent for two con­sec­u­tive months might truly point to a real re­bound," said Lu Ting, chief Greater China econ­o­mist at Bank of Amer­ica Corp. in Hong Kong. The "el­e­vated" trade sur­plus may mean the cen­tral bank will be re­luc­tant to cut lenders' re­serve re­quire­ments, Lu said while main­tain­ing his fore­cast for "at most" one 0.5 per­cent­age­point re­duc­tion by year-end. In­dus­trial pro­duc­tion, fixedas­set in­vest­ment and re­tail sales ac­cel­er­ated in Oc­to­ber, gov­ern­ment re­ports showed on Nov. 9, sig­nal­ing that eco­nomic growth will ex­ceed Premier Wen Ji­abao's 7.5 per­cent tar­get for his last year in of­fice. China is con­fi­dent it will achieve ex­pan­sion this year of at least 7.5 per­cent, Zhang Ping, head of the Na­tional De­vel­op­ment and Re­form Com­mis­sion, said at a sep­a­rate briefing yes­ter­day dur­ing the congress.

At the same time, the trade out­look is grim for the com­ing months and will be dif­fi­cult next year, Chen said. Zhang said China needs to pre­pare for pro­longed chal­lenges in­clud­ing the debt tur­moil in some coun­tries and slug­gish global growth while solv­ing do­mes­tic is­sues such as over­ca­pac­ity.

China's Oc­to­ber im­port growth trailed the me­dian econ­o­mist es­ti­mate of 3.4 per­cent in a Bloomberg sur­vey and com­pared with a 28.7 per­cent in­crease in Oc­to­ber 2011. In­bound ship­ments in Au­gust recorded the first non-hol­i­day drop since 2009. Oc­to­ber's trade sur­plus com­pared with the $27.3 bil­lion me­dian fore­cast and a $27.7 bil­lion ex­cess in Septem­ber. Fall­ing global com­mod­ity prices are con­tribut­ing to the slow­down in im­port growth, Chen said.

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