China trade performance improves on stronger exports

A worker adjusts a rope at a construction site in Shanghai, China, Friday, Sept. 6, 2013. China’s economy appears to be gradually rebounding from its deepest slump since the 2008 crisis, but analysts say improvement will depend on the strength of global demand for Chinese exports. AP

BEIJING – China’s trade performance was better than expected in August, as stronger exports to recovering overseas economies caused the trade surplus to widen to $28.6 billion, customs figures showed Sunday.

Improved exports, a key driver of growth for China, are a positive sign for the world’s second largest economy which has struggled since early this year, analysts said.

The trade surplus rose 8.3 percent from the same month last year and also widened from $17.8 billion in July, according to customs figures.

Analysts had forecast a trade surplus of $20.4 billion, according to a survey of 11 economists by Dow Jones Newswires.

“The surplus is higher than expected thanks to strong exports. The figures are good and show an upward trend in China’s trade,” Liao Qun, an economist at Citic Bank International, told AFP.

“China’s export markets began to grow strong again as the United States is back on track and Europe is stabilizing,” he said.

Exports jumped 7.2 percent year-on-year to $190.7 billion last month, customs said in a statement on its website.

Economists had forecast a 6.0 percent annual rise in exports for August, Dow Jones Newswires said. In July, exports grew just 5.1 percent on the year.

Besides weak demand, China’s exports have also been hurt by appreciation in its yuan currency, which makes its products more expensive overseas, analysts say.

Separately, imports rose a weaker-than-expected 7.0 percent to $162.1 billion in August, less than the 11.7 percent rise forecast by analysts.

Weak imports could still be a sign of worry for the economy, signaling that domestic demand is faltering, analysts said.

“The import figure is lower than expected, indicating that the demand from the domestic market is not that strong,” Ma Xiaoping, a Beijing-based economist for British bank HSBC, told AFP.

“However, there is no need to worry too much, as the effect of stimulus policies revealed earlier this year and the rebound in domestic demand will take time to realize,” she said.

The market is watching for signs of recovery in China, which the global economy relies on to sustain growth.

China’s economy expanded 7.7 percent last year, the slowest growth since 1999.

In the final quarter of last year, growth accelerated to 7.9 percent, but has slowed in successive quarters to 7.7 percent in the first quarter and 7.5 percent in the second quarter.

But China’s manufacturing activity strengthened in August to its highest level in 16 months, official figures showed, with the closely watched purchasing managers’ index (PMI) rising to 51.0 from 50.3 in July.

Another PMI measure released by HSBC rebounded to 50.1 in August, its first month of expansion since April. A reading below 50 indicates contraction, while anything above signals expansion.