BEIJING- China’s imports unexpectedly grew in October while exports contracted at a quicker pace, in a mixed set of indicators that showed the world’s second-largest economy facing persistent risks despite a recent improvement in domestic demand.
The trade figures follow a run of mostly upbeat data that showed Beijing’s support measures have helped bolster a tentative comeback, although a protracted property crisis and soft global demand continue to dog policymakers heading into 2024.
Exports shrank 6.4 percent from a year earlier in October, customs data showed on Tuesday, faster than a 6.2 percent decline in September and worse than a 3.3 percent fall expected in a Reuters poll. Imports rose 3.0 percent , dashing forecasts for a 4.8 percent contraction and swinging from a 6.2 percent fall in September. Imports snapped 11 straight months of decline.
“The figures are in contrast to market expectations. The bad exports data may hit market confidence as we had expected the supply chain of exports to recover,” said Zhou Hao, economist at Guotai Junan International.
“The significant improvement in imports may come from rising domestic demand, in particular a demand to replenish stocks.”
The yuan and Chinese stocks fell following the data, which reinforced markets’ continued concerns about a fragile and uneven recovery.
China’s official purchasing managers’ index last week showed both new export and import orders shrank for an eighth consecutive month in October, suggesting manufacturers are struggling for buyers overseas and ordering fewer components.
“Since the global electronics market is on the rise, as affirmed by South Korea and Vietnam’s export performance, China’s poor export data points to weak demand in other categories, such as Christmas goods and garments,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.
“The positive surprise on imports seems to reflect a firming up in domestic demand, rather than deriving from distortions caused by the one-time bulk buying of commodities,” he added.
China imported 13.52 percent more crude oil in October from a year earlier, a marginal increase on September’s growth. Soybean imports jumped 25 percent from a year earlier, as the surge in cheap and plentiful shipments from Brazil continued.
Trade with China’s major peers continued to contract, with exports to Southeast Asia, its largest trade partner, down 15.1 percent.
Trade with Australia was the exception amid improving relations between Beijing and Canberra, cooling diplomatic tensions that had arisen in recent years over a host of issues including national security and COVID. China has in recent months lowered trade barriers on Australian barley and wine exports.
Exports to Australia rose 5.9 percent in October while imports from the resource-rich nation climbed 12.0 percent. – Reuters