The recovery in China’s economy gained new impetus on Wednesday with figures showing that the decline in exports and imports slowed sharply in September.
The Chinese authorities said that exports had fallen 15.2 per cent in September compared to the same month last year, against a 23.4 per cent decline in August.
The improvement was even more pronounced in imports which dropped 3.5 per cent in September after falling 17 per cent the month before, an indication that domestic demand in China is strengthening. Both exports and imports declined by smaller amounts than most economists had predicted.
Boosted by an aggressive government stimulus plan including a massive increase in bank loans this year, China has rebounded more sharply than most other economies and analysts forecast that third quarter gross domestic production growth, which is to be announced next week, will exceed 9 per cent.
“A small uptick in consumption in the US and Germany combined with expectations of higher orders for the Christmas season had raised hopes of a return to life for China’s export sector,” said Tom Orlik, economist at Stone & McCarthy in Shanghai. “Today’s figure suggests the recovery is now under way.”
The figures confirmed the conclusions from the latest purchasing managers’ index reports, which suggested there was an expansion in export demand over the past three months. Traffic through Chinese ports has also shown signs of recovery. Shanghai International Ports said that cargo volume rose in September for the first time in 11 months.
However, economists said that while volumes of Chinese exports were picking up, there were a lot of indications that prices were dropping as buyers negotiated aggressively over terms.
The September trade figures were boosted by a larger number of working days compared with the same month last year. China’s trade surplus declined from $15.7bn in August to $12.9bn last month.
Separately, the country’s customs authority said China imported a record 64.6m tonnes of iron ore last month, up nearly a third from 49.7m tonnes in August, as local steelmakers continue to buoy demand for the commodity.
The country’s foreign-exchange reserves, already the world’s biggest, rose by about $141bn in the third quarter to $2,273bn, the People’s Bank of China announced on Wednesday. Local bank lending rose 25.9 per cent to Rmb516.7bn ($75.7bn), up from Rmb410.4bn in Augus.
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