Econintersect: There was a little pin prick in the increasingly positive economic news from China yesterday. Exports fell quite unexpectedly in September 2013. China’s General Administration of Customs reported a decline of 0.3% (year-over-year) for shipments out of the country. According to Bloomberg, the median expectation had been for again of 5.5%. Not one of Bloomberg‘s sources had estimated a number as low as reported.
Click on graphic for larger image at Trading Economics.
The report ended a brief two-month advance in export data from China. The month earlier saw an advance of 9.8% from a year earlier and a gain of 7.8% from July.
For September exports to the U.S. were higher (+4.2% y-o-y) while exports to the EU, South Korea and Taiwan all declined.
Numbers for September are not a good reflection of overall economic strength of demand for Chinese goods, according to Dariusz Kowalczyk, senior economist and strategist at Credit Agricole in Hong Kong, quoted by Bloomberg. A spokesman for customs office was also dismissive of the significance of the report. Zheng Yuesheng said:
“Sometimes a single month’s data can’t tell the true story, and there are other factors as well. I see this as a seasonal thing.”
The relatively high exports for China can be seen in the graph from Trading Economics (above, beginning of article).
Reuters points out that there was a festival in China in September which reduced the number of work days compared to 2012. Reuters also quoted a note from ANZ bank that cited a rising yuan as a headwind for exports. Other cautionary notes are contained in the Reuters article, including the following:
Analysts have long warned that a recovery in China’s economy may be fragile and brief, especially if Chinese leaders stick to plans for financial reforms, including curbing extravagant investment, which would hurt growth in the near term.
Imports for September were inline with median estimates by Bloomberg, coming in at +7.4% year-over-year.
Sources:
China Exports Unexpectedly Drop (Bloomberg, 12 October 2013)
China Exports (Trading Economics, 13 October 2013)
China’s September export growth in surprise slide (Xiaoyi Shao and Koh Gui Qing, Reuters, 12 October 2013)
