China' s imports, exports surge as global economy reopens

BEIJING (REUTERS) -  China&rsquo s imports grew at their fastest pace this year in September, while exports extended strong gains as more trading partners lifted coronavirus restrictions in a further boost to the world&rsquo s second-biggest economy.

Exports in September rose 9.9 per cent from a year earlier, customs data showed on Tuesday (Oct 13), broadly in line with analysts&rsquo expectations and up from a solid 9.5 per cent increase in August.

The  strong trade performance  suggests Chinese exporters are making a brisk recovery from the coronavirus pandemic&rsquo s hit to overseas orders. As the global economy restarts, Chinese firms are rushing to grab market share as their rivals grapple with reduced manufacturing capacity.

&ldquo A jump in imports suggests that domestic investment spending remains strong,&rdquo Capital Economics senior China economist Julian Evans-Pritchard said. &ldquo Meanwhile, exports remained strong, most likely thanks to the recent strength of retail sales among China&rsquo s major trading partners.&rdquo

China&rsquo s factory activity has also picked up as  international trading gradually resumes.

But some analysts warn exports could peak soon as demand for Chinese-made protective gear recedes and the base effect of this year&rsquo s massive declines wears off.

Imports surged 13.2 per cent, returning to growth from a fall of 2.1 per cent in August and much stronger than expectations for a 0.3 per cent increase.

RECOVERY AT HOME

Wang Jun, chief economist at Zhongyuan Bank, said the data showed government support for the economy has kicked as the epidemic comes under control.

&ldquo This has boosted domestic demand, especially investment-led demand, which buoyed imports,&rdquo Mr Wang said.

&ldquo The other factor is the yuan&rsquo s recent appreciation, which is good for imports and people&rsquo s spending power.&rdquo

The rise in imports pushed the trade surplus for September down to US$37 billion (S$50.3 billion), compared with US$58.93 billion in August and lower than an expected US$58.00 billion.

Already  heightened US-China tensions  are expected to escalate ahead of the US presidential election. China remains well behind on its pledge to boost purchases of U.S. goods under an agreement that was launched in February.

China&rsquo s trade surplus with the United States narrowed to US$30.75 billion in September from US$34.24 billion in August.

Top US and Chinese trade officials reaffirmed their commitment to a Phase 1 trade deal in a phone call in August.

However, US Department of Agriculture Secretary Sonny Perdue cast doubt earlier this month on the likelihood of China meeting its commitment to purchase enough agricultural products as promised in its Phase 1 trade deal.