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--Exports Growth Below Expectations But Still Strong
--Imports Growth Beat Estimates Although At a Slower Pace
--Both Export, Import Growth Rates Boosted by Base Effect
BEIJING (MNI) - Data released Friday by the General Administration of
Balance (bln $) Exports Y/Y % Imports Y/Y %
October 38.2 6.9 17.2
MNI Survey Median 38.9 7.1 16.1
Previous 28.5 8.1 18.6
--China Oct. Seasonally Adj. Exports +1.9% m/m VS +4.4% Sept.
--China Oct. Seasonally Adj. Imports +11.2% m/m VS +11.9% Sept.
--China Oct. Seasonally Adj. Exports +8.2% y/y VS +5.9% Sept.
--CHINA Oct. Seasonally Adj. Imports +23.2% y/y VS +13.6% Sept.
TAKEAWAY: Chinese exports and imports grew at slower paces in October, with
export growth slowing below expectations.
Both the import and export year-on-year growth rates were flattered by a
weak comparison bases in October last year, when exports fell 7.3% and imports
The slowdowns indicate that both domestic and overseas demand fell during
the last month.
According to the General Administration of Customs, October exports rose
6.9% year-on-year in U.S. dollar terms. The reading was below the 8.1% gain in
September and also lower than the MNI median forecast for a 7.1% rise.
The result was in line with the official manufacturing PMI sub-index of
exports orders in October. Export order index dropped to 50.1, the lowest level
Overseas demand was sluggish, with the year-on-year growth rates supported
by comparison with very weak export levels in October last year. Among China's
three biggest customers, export growth to the United States decelerated while
exports to the European Union and to Japan rising slightly.
Exports to the U.S. rose 8.1% year-on-year to $37.75 billion, down from
13.8% growth in September and the lowest growth rate since February, but still
significantly higher than the 5.6% decrease posted in October 2016. Exports to
the European Union grew 11.2% to $30.57 billion, the lowest export value since
April. The October growth rate in exports to the EU was higher than the 10.5%
in September and well above the 8.6% decrease last October.
Exports to Japan rose 5.6% to $11.7 billion, the highest growth rate since
July and much higher than the 3.2% decrease last October.
The yuan exchange rate rose 0.3% against the greenback in October, compared
with a 0.76% depreciation in September.
"The comparison level last year had some effect and falling export prices
played a negative role" in the recorded value of exports, Xie Yaxuan, chief
economist with China Merchants Securities, told MNI.
Imports increased 17.2% year-on-year in October, higher than the MNI median
forecast for a 16.1% gain but down from the 18.6% rise in September.
"The slowdown in domestic investment, robust material imports in September
and the lower prices of commodities mainly contributed the softer (import)
performance," Xie said.
Due to the impact of the government's environmental protection campaign and
week-long National Day holiday at the beginning of the month, commodity imports
plunged in October.
Imports of iron ore decreased 22.7% month-on-month in October, with China
importing 79.49 million tons, the lowest since February 2016. Coal imports
declined 21.4% m/m to 21.28 million tons.
The performance of imports was also in line with the latest official CFLP
manufacturing PMI, with the import sub-index falling to 50.3, the first drop
below the 51 level in five months.
The import growth rate continued to outpace the export growth rate in
October, the 15th consecutive month it has done so, but absolute exports
exceeded imports, resulting in a $38.2 billion trade surplus. The surplus was
slightly lower that the MNI survey median forecast of $38.9 billion, but much
higher than September's $28.5 billion surplus.
In the first ten months of this year, the trade surplus amounted to $334.77
billion, below the $426.99 billion surplus in the same period last year, with
exports rising 7.4% y/y and imports up 17.2% y/y so far this year.
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