China’s future economic outlook looks upbeat despite slow export growth
China’s export growth slowed in October, but beat forecasts as rising global demand for the holiday season, an eased power shortage and easing supply chain disruptions, is something the world’s second-largest economy is facing. The pressures were offset.
However, imports missed analysts’ expectations, pointing to an overall weakness in domestic demand.
Outbound shipments jumped 27.1 percent in October from a year earlier, slower than September’s 28.1 percent gain.
Analysts polled by Reuters had predicted the growth rate would shrink to 24.5 percent. Zhiwei Zhang, chief economist at Pinpoint Asset Management, said stronger exports would help cushion a weak domestic economy, and provide more room for the government to change economic policy.
“The government may wait till the end of the year to loosen monetary and fiscal policies, now that exports provide a buffer to overcome the economic slowdown,” he said. Recent data points to a manufacturing slowdown.
An official survey showed that factory activity shrank for a second month in October, while industrial output growth slowed to its lowest since March 2020 – the first wave of the pandemic. However, under heavy government intervention, some supply constraints have begun to ease in recent weeks.
Power shortages are beginning to ease after heavy government intervention, due to coal shortages, tighter emissions standards and strong industrial demand.
Premier Li Keqiang said on Tuesday that China’s government would take steps to support the industrial sector as the economy faces renewed downward pressure. Imports rose 20.6 per cent in October compared to a year ago, faster than a 17.6 per cent increase in September, but missed expectations of a 25 per cent growth.
China’s crude oil imports fell to their lowest level since October 2018, while coal imports slowed due to a boom in domestic production.
Iron ore procurement declined for the second consecutive month due to subdued demand. China posted a trade surplus of $84.54 billion last month, up from the survey’s estimate of $65.55 billion and September’s surplus of $66.76 billion.
The country’s economy grew 4.9 per cent in the July-September quarter compared to a year ago, the weakest reading since the third quarter of last year.
China’s trade surplus with the United States stood at $40.75 billion in October, down from $42 billion in September, Reuters calculated based on customs data.
US Trade Representative Catherine Tai last month promised to exclude some Chinese imports from tariffs, while pressuring Beijing for failing to fulfill some of the promises made in a “Phase 1” trade deal made under the Trump administration Was.
.