Picture: REUTERS
Picture: REUTERS

Beijing — China’s imports and exports grew at a faster pace in September than in the previous month, suggesting the world’s second-biggest economy is still expanding at a healthy clip despite widespread forecasts of an eventual slowdown.

Imports in dollar-denominated terms grew 18.7% in September from a year earlier, beating analysts’ forecasts for a 13.5% expansion and accelerating from 13.3% in August, customs data showed on Friday.

The gain was stronger than the most optimistic forecast in a Reuters analysts poll.

Exports rose 8.1%, below forecasts of 8.8% but handily beating August’s 5.5%.

The solid September readings will be welcome news for Beijing ahead of a major political leadership reshuffle next week, at which President Xi Jinping is expected to further tighten his grip on power.

Once again, China’s imports were led by industrial resources as a year-long construction boom shows no signs of flagging, boosting demand for materials from steel to copper.

China’s September iron ore imports rose to a record 103-million tonnes, up from 88.7-million tonnes in August, according to Reuters calculations. Copper imports were the highest since March.

That left the country with a trade surplus of $28.47bn, less than the near $40bn expected and down from around $42bn in August.

China’s foreign trade will likely grow at a double-digit pace this year if current conditions continue, the General Administration of Customs said.

In addition to pointing to still robust demand, some of the surge in September imports may be due to companies “front loading” supplies ahead of a week-long national holiday in early October, analysts said.

Capital Economics’ China economist, Julian Evans-Pritchard, said the timing of the mid-Autumn festival this year also meant there were more working days last month than in September 2016, suggesting October figures should show a partial reversal.

“Nonetheless, today’s figures suggest that not only has strong foreign demand continued to prop up manufacturing activity in China but domestic demand remains resilient, too,” Evans-Pritchard said.

Surprising resilience

China’s economy has surprised analysts with its resilience so far in 2017, expanding by 6.9% in the first half, though most market watchers have stuck to predictions that it will slowly begin to lose growth momentum later in the year.

Authorities are in the midst of a campaign to reduce the risks from a rapid build-up in debt produced by years of credit-fuelled stimulus, and the continued strength of imports and exports could give policymakers confidence to stick with their deleveraging push into next year.

Government measures to cool hot housing prices are also expected to start to weigh on property investment and construction.

China is also in the midst of its toughest environmental crackdown ever, ordering many mills, chemical plants and coal companies to sharply reduce output or close in coming months to reduce the country’s notoriously thick winter smog.


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