Jump in Chinese exports shows strong recovery continues

Increase in October was the highest in 19 months and ahead of analysts' expectations

FILE PHOTO: Containers are seen at the Yangshan Deep-Water Port in Shanghai, China October 19, 2020. REUTERS/Aly Song/File Photo

Exports from China grew at the fastest pace in 19 months in October, while imports also rose, official data showed on Saturday, as the world's second-largest economy continued to recover after being hit hard by the coronavirus crisis earlier this year.

Exports in October rose 11.4 per cent from a year earlier, beating analysts' expectations of a 9.3 per cent increase and quickening from a solid 9.9 per cent increase in September.

The surge in exports pushed the trade surplus for October up to $58.44bn billion, compared with the poll's forecast for a $46bn surplus and a $37bn surplus in September.

China's trade surplus with the United States widened to $31.37bn in October, from $30.75bn in September.

China's exports have stayed largely resilient amid the Covid-19 global pandemic, as strong demand for medical supplies and reduced manufacturing capacity elsewhere worked in the country's favour.

"Exports growth quickened further and significantly exceeded expectations, indicating a relatively strong momentum," said Liu Xuezhi, an analyst at Bank of Communications in Shanghai.

China's exports could stay strong in the rest of 2020 as domestic firms resume production faster than global rivals and sell more Covid-19 related goods such as face masks, Mr Liu said.

However, some analysts said exports could come under pressure in the coming months, as major European economies such as France, Germany and the United Kingdom move back into lockdown as a second wave of coronavirus cases gathers strength.

Factory activity accelerated at the fastest pace in nearly a decade in October, a private survey showed, although the official survey pointed to some slowdown in the expansion. Export orders expanded.

Imports rose 4.7 per cent year-on-year in October, slower than September's 13.2 per cent growth, and underperforming expectations in a Reuters poll for a 9.5 per cent increase, but still marking a second straight month of growth.

Chinese airlines are shunning some deliveries of Airbus aircraft, citing fears of coronavirus infection for their staff in the latest tussle over efforts to keep delayed deliveries on track despite the pandemic, industry sources said.

Analysts said the solid trade performance could provide a boost to China's broader economic recovery, which has gained steam after suffering from a deep slump earlier this year.

China's economy grew 4.9 per cent in the third-quarter from a year earlier, but growth could slow to just over 2 per cent this year – the weakest in over three decades but still much stronger than other major economies.

"China has a better recovery from the pandemic and has a comparative advantage, so it has gained a larger market," said Zhou Hao, an economist at Commerzbank in Singapore.

"Of course, this advantage is also temporary and may last until the end of the year."

EDITOR'S PICKS
NEWSLETTERS