China's Exports Accelerated In September

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(Updates with economist’s comment in fourth paragraph.)Oct. 13 (Bloomberg) — China’s exports expanded at a faster pace for the second month and import growth resumed, adding to signs global demand is recovering after overseas shipments from Taiwan and South Korea beat estimates.

Sales abroad increased 9.9 per cent in September from a year earlier, China’s customs administration said today in Beijing. That compares with a 2.7 per cent gain in August and a 5.5 per cent median forecast in a Bloomberg News survey of 35 economists. Imports gained 2.4 per cent, leaving a $27.67 billion trade surplus.

Today’s data may reduce pressure on Premier Wen Jiabao to step up policy easing ahead of a transfer of power to a new generation of leaders that starts next month. The People’s Bank of China has refrained from cutting interest rates since July, in contrast with its counterparts in South Korea, Brazil and Australia.

“China’s exports seem to have been supported by better sentiment abroad after the European Central Bank’s decision on government bond purchases and the rollout of further easing in the U.S.,” Ding Shuang, a Hong Kong-based economist with Citigroup Inc., said before the release. “However, recession in the euro zone and the possible fiscal cliff in the U.S. will likely cap the upside in the months ahead.”

Ding, who previously worked for the International Monetary Fund and China’s central bank, said two more reductions in banks’ reserve requirement ratio are likely over the rest of this year. He expects economic growth to pick up this quarter “with continued policy support.”

Yuan Strengthens
Stocks in China have slumped about 14 per cent from this year’s high on March 2 on concern the government isn’t loosening monetary policy or introducing stimulus policies fast enough to reverse the economic slowdown.

The yuan strengthened for a 10th straight week, touching the highest level in 19 years, on speculation the government will announce measures to revive growth.

The increase in imports compared with the median estimate in a Bloomberg survey for a 2.4 per cent gain. Inbound shipments recorded the first non-holiday drop in August since 2009. September’s trade surplus was higher than the $20.5 billion median forecast in the survey and compared with a $26.66 billion excess in August.

Foreign trade expanded at a slower pace than last year in the first three quarters, according to today’s report, putting at risk the government’s 2012 target of 10 per cent growth. Exports through September rose 7.4 per cent while imports gained 4.8 per cent, leaving a trade surplus of $148.3 billion.

China’s economy probably expanded 7.4 per cent in the third quarter from a year earlier, according to the median forecast in a Bloomberg News survey. If confirmed on Oct. 18, that would be the least since 2009 and the seventh quarterly deceleration.

–Zheng Lifei. With assistance from Cynthia Li and Sandi Liu in Hong Kong, Regina Tan and Penny Peng in Beijing, Ailing Tan in Singapore. Editors: Nerys Avery, John Liu

To contact Bloomberg news staff on this story: Zheng Lifei in Beijing at [email protected]

To contact the editor responsible for this story: Paul Panckhurst at [email protected]

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