China's September exports data beat expectations

The increase in exports came in the midst of intense speculation that China for the first time in recent years may miss the 7.5 percent official target as an official think-tank besides the World Bank predicted that it may end at 7.3 or 7.4 percent.

However, China's central bank said the growth target of around 7.5 percent this year would be met helped by urbanisation and economic restructuring.

Property market downturn, the government's efforts to fight pollution and a slowing manufacturing sector are weighing on economic growth in the short term, People's Bank governor Zhou Xiaochuan said in a statement.

Premier Li Keqiang, currently on a foreign tour, had said last week that the government would tolerate a growth rate slightly below 7.5 percent.

Efforts are on to ramp up investment in projects such as water conservation and technology, he had said.

Today's trade data showed that trade surplus in September has more than doubled from last year to USD 31 billion compared with USD 49.8 billion seen in August.

Surplus in the first nine months was up 37.8 percent from the previous year to USD 231.6 billion. Zheng Yuesheng, GAC spokesman, said China's foreign trade was gaining traction quarter by quarter despite a complex world economy.

The spokesman attributed September's strong growth to a string of government measures adopted in May to stabilize foreign trade, as well as rebounding global demand. "We hope the strong momentum will continue in the fourth quarter," Zheng said, adding that export pressure will decrease in the fourth quarter. The export leading index improved by 1.4 percentage points from August to reach 43.3 percent in September, indicating exporters are more optimistic about coming months, GAC said.

In contrast to the official optimism, Lu Zhengwei, chief economist of Industrial Bank, was less upbeat while commenting on the trade outlook. "The rejoicing (over exports) will be short-lived, and disappointment will return soon," Lu warned, predicting a sharp slowdown in exports in the fourth quarter based on past trade fluctuations, Xinhua report said.

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Liu Ligang, chief Greater China economist at ANZ Banking Group, said the weak growth of foreign trade in the first nine months made it difficult to achieve the GDP growth target of 7.5 percent.

"We estimate China's economy expanded only 7.1 percent in the third quarter," Liu said. That growth, if it turns out to be true, will mark its slowest growth since the first quarter of 2009.

The National Bureau of Statistics is scheduled to release quarterly GDP data next week. For the January-September period, China's foreign trade added 3.3 percent year on year to reach USD 3.16 trillion, with exports up 5.1 percent at USD 1.7 trillion and imports up 1.3 percent at USD 1.46 trillion.

The growth in foreign trade in the first nine months fell short of the government's annual growth target of 7.5 percent for 2014.

Foreign trade in the past two years failed to hit government targets. The European Union (EU) remained China's biggest trading partner, with two-way trade totaling 2.81 trillion yuan (USD 457 billion) in the Jan-Sept period, up 10.2 percent from a year earlier.

China's trade with the US, its second-largest trading partner, rose 5.2 percent year on year to 2.48 trillion yuan (USD 413 billion) from January to September, while China-ASEAN trade went up 6 percent to 2.13 trillion yuan.

Sour political relations between China and Japan, now its fifth-largest trading partner, continued to affect bilateral trade, which added only 0.4 percent year on year in the first nine months. China ran a trade deficit of 63.4 billion yuan with Japan in the period.

The GAC spokesman expected negative factors to affect the country's foreign trade, including less competitive made-in- China products in the global market, fewer foreign direct investment (FDI) flows into the manufacturing sector and rising costs for exporters.

The market share of labor-intensive Chinese products in the US, EU and Japan, such as garments, textiles, footwear, furniture, plastics, bags and toys, is now shifting to neighbouring countries in southeast Asia, as higher production costs at home undermined their competitiveness, GAC said.

A slump of 15.7 percent in FDI in China's manufacturing sector during the January-August period will also weigh on exports, as about 46 percent of China's exports came from foreign-funded enterprises.

According to the GAC, the slower growth in import value was mainly due to price declines in commodities since this year.

China's iron ore imports jumped 16.5 percent year on year to reach 700 million tonnes from January to September, while crude oil imports were up 8.3 percent to 230 million tonnes, soy bean imports were up 15.3 percent to 52.74 million tonnes, and copper imports rose 10.5 percent to hit 3.59 million tonnes, GAC data showed.

To help balance its international payment, China's cabinet, announced a series of measures in late September to encourage imports, a move Zheng said will further boost imports in the fourth quarter.