Friday, March 29, 2024 | Ramadan 18, 1445 H
clear sky
weather
OMAN
25°C / 25°C
EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

China August imports beat forecasts but exports slows

1103625
1103625
minus
plus

BEIJING: China posted stronger-than-expected import growth in August, reinforcing views that the world’s second-largest economy is still expanding at a healthy pace despite tighter policy.


China’s imports grew 13.3 per cent from a year earlier, official data showed on Friday, handily beating analysts’ forecast of 10 per cent and accelerating from an 11.0 per cent pace in July.


Purchases of industrial commodities continued to lead the way as soaring steel prices boost Chinese mills’ appetite for high-quality foreign iron ore to feed a year-long construction boom.


“The strong import data suggests that domestic demand may be more resilient than expected in the second half to less accommodative monetary policy,” said Louis Kuijs at Oxford Economics in a note, referring to a clampdown on riskier forms of lending which is pushing up borrowing costs.


Exports showed signs of softening, however, with growth cooling to 5.5 per cent from a year earlier, roughly in line with analysts’ forecasts for a 6.0 per cent increase but down from 7.2 per cent in July. Export growth was the slowest since shipments fell in February, but analysts don’t foresee a protracted slowdown for the world’s largest exporter as global demand still appears solid.


Germany’s BGA trade association now expects German exports to rise 5 per cent in 2017, double its earlier forecast, Die Welt newspaper reported on Friday. Global manufacturing activity also expanded strongly in August, adding to views that demand was holding up in the current quarter.


In addition, China has tended to lag export trends seen elsewhere in North Asia this year. Neighbouring South Korea last week reported robust shipments in August, though the rate of growth eased slightly from July.


China’s electronics exports, which tend to be higher-value and higher-margin goods, increased 7.4 per cent in August, while textile and apparel shipments fell by the single digits.


A surging yuan could complicate China’s trade picture in coming months. Policymakers are beginning to worry as exporters come under strain as the currency scales 21-month highs, insiders said.


But most analysts say the stronger currency has not yet had a big impact on exports as companies price orders based on longer-term currency trends.


“The strength in the yuan is unlikely to change our optimistic view on China’s near-term export outlook,” ANZ senior China economist Betty Wang wrote in a note, arguing that China has a strong position in global supply chains. Nevertheless, some smaller Chinese exporters have started to complain of losses due to a sharp turnaround in the yuan, which has firmed nearly 7.8 per cent against the faltering US dollar so far this year.


Much of that surge has come in just the past few months, with the currency appreciating 2.1 per cent in August alone. The mixed performance left China with a trade surplus of $41.99 billion for August, the General Administration of Customs said, the lowest since May.


Analysts were expecting China’s trade surplus to have widened to $48.6 billion in August from July’s $46.73 billion.


The growth of China’s exports to the United States at 8.4 per cent in August was the slowest pace since a decline in February, while its imports of US goods rose 18.1 per cent on-year after a 24.2 per cent jump in the previous month.


Shipments to the European Union rose only 5.2 per cent in August, the second straight month of declining growth, while exports to Southeast Asia and Taiwan grew at a faster rate.


— Reuters


SHARE ARTICLE
arrow up
home icon