For the moment at least, China’s exporters have defied slumping US and European economies as the annual Christmas supply period ramps up.
Figures released Monday night in Beijing reveal that to the surprise of commentators, September was an all time record for exports.
China’s trade surplus hit a record $US29.3 billion last month as exporters defied all the forecasts of falling international demand.
Exports rose 21.5% year-on-year last month compared with 21.1% in August.
In dollar terms, exports in September totalled $US136.4 billion, while imports grew 21.3% to $US107.1 billion, even though the price of oil and many metals has fallen with the slump in global commodity prices.
For the first nine months of this year, the surplus shrank 2.6%, or $US4.92 billion, when compared to the first nine months of last year.
Analysts say the surplus will fall as the effects of the widening financial crisis, especially in the US and Europe, suppress economic growth and demand.
This month is the peak for the huge surge in shipments to markets in the west for the Christmas selling season, so there should be another solid surplus, while November’s should show some tapering off, but last minute exports often are pushed out in that month as well.
But with retail demand softening and falling outright across wide parts of the US, the UK and Europe, it’s now problematic if there will be any great surge in exports this month and in November as there were in the past two years.
The September figure surpassed the previous monthly high of $US28.7 billion set in August.
Trade with the 27-nation EU rose 26% over the first nine months of the year to $US322.5 billion (there was no breakdown the figure by imports and exports).
Trade with India, China’s 10th largest trading partner, soared 55% in the first nine months.
As the domestic economy slows, China has cut interest rates twice in the past two months and this week will increase the pool of money available for lending by reducing the amount Chinese banks must hold in reserve (the reserve asset ratio) by 0.5% to 16%.
A 5% tax on interest on bank deposits has been suspended and economists expect additional measures including more tax reductions and a government stimulus plan to boost growth.
The rise in exports was despite a 13% fall in the amount steel exported in September.
China is the world’s biggest steel producer, but shipments fell to a three month low last month of 6.7 million tonnes. from a record 7.68 million in August.
That’s still 50 percent higher than a year earlier, according to official figures.
Meanwhile, here’s an interesting factoid from the Financial Times:
According to China Customs, toy exporters declined in number by 52.7% to 3,507 factories in the first seven months of the year, compared with the same period in 2007, providing backing for persistent anecdotal reports that cost pressures have forced large numbers of toy factories to close .
