China’s trade is rebounding and there could be more to it than simply a “China bubble”. The country’s exports are being fuelled by international demand, with Europe, the U.S., and Japan as the country’s top three export destinations.
September exports beat expectations by falling 20.1% year over year on a seasonally-adjusted basis, yet rising 6.3% month on month at the same time. Fourth quarter figures are expected to show year on year growth due to an easier comparison with last year’s downturn.
China’s trade strength says good things about inventory build in developed economies.
Caijing: The export recovery is being propelled by the need for developing countries to restock depleted inventories, as well as Christmas orders, Long Guoqiang, an economist at the Development Research centre of the State Council, told Caijing on Oct. 14.
The restocking cycle is likely to run into the fourth quarter, while Christmas orders generally peak in August and September, Long said.
The New York Times provides an excellent visualisation of the trade situation, which is now starting to rebound given the September decline was lower than data through June, and since in the fourth quarter China is expected to report export growth.