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Economy

China’s imports rise for 1st time in nearly 2 years, exports grow

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2016-09-09 09:41Shanghai Daily Editor: Huang Mingrui ECNS App Download

China's export growth surged in August as the yuan weakened and imports rose for the first time in nearly two years, suggesting domestic demand may be picking up and helping the world's second-largest economy to stabilize, official data showed.

Exports in yuan-denominated terms rose 5.9 percent year on year in August, accelerating from 2.9 percent in July. Imports increased 10.8 percent, reversing from a drop of 5.7 percent, according to figures from the General Administration of Customs.

The import rise was the first expansion in value terms since October 2014.

The country enjoyed a trade surplus of 346 billion yuan ($51.9 billion) in August, slightly below July's seven-month high. Imports of automobiles, auto parts, semiconductor products and raw material increased sharply during the month.

The rise in imports may be due to the launch of new consumer electronic gadgets just before the year-end shopping season. China's supply chain was boosted when firms imported more components to make products such as Apple's iPhone 7, which was officially launched yesterday in the US, market watchers said.

"The improvement in imports is mostly a reflection of stronger domestic demand. Chinese companies are restocking (raw materials), and also are now expecting prices to start rising," said Wang Jianhui, an economist with Capital Securities in Beijing.

Capital Economics said in a note that "the size of the pick-up suggests that there may also have been some improvement in import volumes last month."

If it proves sustainable, a trade recovery or even signs of trade stabilization would help ease fears that China's economy is becoming increasingly lopsided, and give feeble global growth a much-needed shot in the arm.

Nomura research analysts Zhao Yang and Wendy Chen said in a note yesterday that "imports of iron ore and oil improved significantly, which suggested domestic investment also improved in August, helped by post-flood reconstruction."

The rise in exports was supported by a weaker yuan, Louis Lam and Raymond Yeung at Australia and New Zealand Banking Group said, adding that a "resilient trade balance" would ease capital outflows that would otherwise be worse due to exit of portfolio funds.

But they cautioned a sluggish global demand will still pressure China's outlook for exports and manufacturing as the data indicated that new export orders in August continued to be weak amid external uncertainties.

"We are still wary of the impact of Brexit on European demand. Downside risk prevails in the next few months," Lam and Yeung wrote.

International Monetary Fund Managing Director Christine Lagarde said earlier this month that the agency will likely downgrade its 2016 global growth forecast again.

  

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