BEIJING: China's exports fell less than expected in September, with monthly figures showing recovery, but a sharper fall in imports left economists divided over whether the country's ailing trade sector is showing signs of turning around.
On the surface, the trade data reinforced views that the world's second-largest economy is still slowly losing momentum, putting more pressure on Beijing to roll out further stimulus measures and keeping global markets on edge.
But the numbers did not suggest a greater risk of a hard landing, either, as some investors have feared.
Exports fell 3.7 per cent from the same period last year, less than a 6.3 per cent drop forecast by economists in a Reuters poll and moderating from a 5.5 per cent decline in August.
However, imports by value tumbled for the 11th straight month, losing over 20 per cent year-on-year in September due to weak commodity prices and soft domestic demand, which will continue to complicate Beijing's efforts to stave off deflation.
Economists had expected a 15.0 per cent drop, after a 13.8 per cent decline in the previous month.
Highlighting persistent weakness in demand at home and abroad, China's combined exports and imports fell 8.1 per cent in the first nine months of the year from the same period in 2014, well below the full-year official target of 6 per cent growth.
That will likely reinforce expectations that Beijing will cut interest rates again in coming months and announce other measures to avert a sharper economic slowdown.
"In general, there are no green shoots in this set of data," said Zhou Hao, senior economist at Commerzbank in Singapore.
"The growth of port throughput volume still remains low." However, monthly figures were more rosy.
China's exports to every major market except Taiwan rose from August, as did imports, and some economists were inclined to give that more weight than year-on-year changes.
Julian Evans-Pritchard of Capital Economics warned that annual export readings may be distorted downward by comparisons with strong export performance at the end of 2014, which many suspected was inflated by yuan speculation disguised as trade.
He suggested paying closer attention to monthly trends, which show a steady rise to most major export markets in the United States and Europe over the summer.
"Basically, exports have been doing better since the second quarter, but that recovery trend has been masked on a year-on-year basis because the second half of 2014 was so strong." Evans-Pritchard also said that import data had become unreliable given massive swings in prices due to the commodity downturn and a divergence between prices and trading volumes.
"For the major commodities like oil, copper, etc. we're actually seeing a pretty healthy trend in import volumes." Indeed, China's imports of copper, iron ore, crude oil and coal all rose in September from August, data from the General Administration of Customs showed.
Still, import volumes are a leading indicator for exports in China, given a large share of materials and parts are re-exported as finished goods, keeping the outlook cloudy.
"September's import figure does not bode well for industrial production and fixed asset investment," ANZ economists wrote in a research note.
"Overall growth momentum last month remained weak and third-quarter gross domestic product growth to be released next Monday will likely have edged down to 6.4 per cent in the third quarter, compared with 7 per cent in the first half." Growth below 7 per cent would be the weakest since the global financial crisis.
China posted a trade surplus of US$60.34bil for September, the General Administration of Customs said, higher than forecasts for US$46.8bil and up slightly from US$60.24bil in August.
While the surplus is largely due to weak imports, it does help ease pressure on the country's money supply from capital outflows, ANZ argued.
China is widely expected to post its slowest economic growth in a quarter of a century this year amid weak demand, factory overcapacity, high debt levels and cooling investment, but there are doubts over whether Beijing can do much about it. - Reuters