Mixed news from China’s October trade report, with exports rising, but not by as much as expected, imports rising, again just short of forecast, and a near record trade surplus of well over $US40 billion resulted for the second month in the past three.
Imports of iron ore dipped in October from September, but were still sharply higher than a year earlier, copper imports rose from the previous month, but oil and soybean imports were lower, but better than a year earlier.
Exports rose 11.6% last month to $US206.9 billion, down from the 15.3% jump in September, while imports rose an annual 4.6% to $US161.5 billion, down from September’s 7% rise.
That left China with a trade surplus of $US45.4 billion for the month, up from $US30.9 billion in September, but down on the record $US49.8 billion in August.
Confirming the sluggishness of China’s economy this year, its combined exports and imports rose 3.8% in the first 10 months from a year earlier.
Analysts say China is now almost certain to miss its trade growth target for a third consecutive year. The government which missed its trade growth targets of 8% last year and 10% in 2012, is aiming for 7.5% growth in 2014.
A feature of the October trade data was the clear impact of the restored tariffs on coal imports in the middle of the month.
Coal imports fell 5% month on month and nearly 22% from a year ago to 20.13 million tonnes in October, after Beijing rolled out import tariffs to protect ailing domestic producers.
Total coal imports from January to October fell 7.7% from the same period of 2013.
Iron ore shipments fell 6.3% to 79.39 million tonnes in October. But they were still a very solid 16.7 million tonnes up on the 67.8 million tonnes imported in the same month of 2013.
Total iron ore imports in the first 10 months were up 16.5% at 778.4 million tonnes, while export of steel products have jumped 42% in the same period.
China’s crude oil imports in October were 24.09 million tonnes, or 5.67 million barrels per day – down 15.5% on a daily basis from the previous month but still up 2.2% from a year ago.
Total imports in the first 10 months were up 9.2% from year ago at 252.6 million tonnes.
Interestingly, the fall in imports came despite a near 10% fall in global oil prices during the month that dragged down the price of Brent crude, the key global oil indicator.
Copper imports were up 2.6% in October from a month ago at 400,000 tonnes.
Imports of soybeans fell 18.5% from a month ago to 4.10 million tonnes. That’s despite the price of soybeans falling to four year lows.
China’s cabinet unveiled detailed measures last Thursday to support imports of high-tech equipment and commodities, such as foodstuffs and consumer goods, in its latest efforts to support the economy and rebalance trade.
That followed recent government steps to offer cheaper loans, tax breaks and currency hedging tools to exporters.
The government has unveiled a burst of “targeted” policy stimulus since April, including cutting reserve requirements for some banks, hastening construction of railways and public housing and allowing local governments to loosen property curbs.
China’s central bank also pledged on Thursday to maintain modest policy support to help the economy weather increasing headwinds in the near term but stressed that it would not flood markets with cash. The central bank confirmed that it had injected 769.5 billion yuan ($US124 billion) into the banking system over the past two months to help maintain liquidity.
