China’s September exports unexpectedly accelerated to hit new record high

China’s export growth unexpectedly accelerated in September to hit the highest monthly level on record, as solid global demand ahead of year-end holidays and price rises offset some impact of power shortages and supply bottlenecks.

Exports, in US dollar terms, grew by 28.1 per cent in September from a year earlier, to $305.74 billion, picking up from the 25.6 per cent growth seen in August, according to data released by the General Administration of Customs on Wednesday. That’s above analysts’ estimate of 21.5 per cent growth in a Bloomberg survey.

Imports rose by 17.6 per cent in September from a year ago to $238.98 billion, slowing from the 33.1 per cent growth in August, below the result of the Bloomberg survey, which had predicted 20.9 per cent growth.

China’s total trade surplus stood at $66.76 billion in September, compared with a revised $58.33 billion in August.

In the first nine months of the year, China’s exports rose by 23.86 per cent year on year to $882.72 billion, decelerating from the 30.4 per cent growth during the first half of the year and down from the 48.81 per cent growth seen in the first quarter.

Imports during the nine-month period grew by 26.45 per cent to $701.04 billion, down from the 43.65 per cent growth in the first half of the year and slower than the 27.62 per cent growth in the first quarter.

“Overall speaking, there are both favourable and unfavourable factors affecting the trade,” said Chinese customs spokesman Li Kuiwen.

On the one hand, the fundamental of China’s long-term economic improvement has not changed, while on the other hand, the global Covid-19 pandemic situation remains unstable, the world economic recovery is tough, the external environment is becoming more complex and severe. China’s trade is still facing many instabilities and uncertainties.”

“The continuing recovery of the domestic economy provide a solid foundation for the sustained growth of trade. The global economy and trade have picked up and the increase of demand in the global market has benefited China’s exports. The rise in international commodity prices has pushed up the value of imports.”

Momentum in the world’s second-biggest economy has weakened in recent months, with the latest power cuts adding further pressures to the manufacturing sector.

Goldman Sachs cut its forecast of China’s economic growth this year to 7.8 per cent from 8.2 per cent, citing recent sharp cuts to production in a range of high-energy-intensive industries. The World Bank, though raised its China growth forecast to 8.5 per cent growth this year, compared with 8.1 per cent forecast in April.

Activity in China’s manufacturing sector contracted in September due to “low sentiment of high-energy-consuming industries”, with the official manufacturing purchasing managers’ index (PMI) – a survey of sentiment among factory owners – falling to 49.6 last month from 50.1 in August.

Among trading partners, the 10 countries of the Association of Southeast Asian Nations (Asean) continued to be China’s largest, followed by the European Union and the United States.

China’s exports to the ASEAN countries rose to $40.36 billion in September, up by 17.33 per cent from a year earlier, while imports rose by 17.28 per cent to $36.19 billion. China’s trade surplus with the nations widened by 17.7 per cent year on year to $4.18 billion.

China’s trade surplus with the US expanded to $42 billion in September from $37.68 billion in August. Its imports from the US rose by 16.6 per cent to $15.4 billion, while exports rose by 30.56 per cent to $57.4 billion.

China’s exports to the European Union rose by 28.61 per cent from a year earlier to $44.47 billion last month, while imports rose by 1.13 per cent to $25.97 billion. China’s trade surplus with the European Union narrowed to $18.50 billion from $20.95 in August.

Elsewhere, China’s exports to Australia rose by 23.77 per cent to $5.96 billion, while imports from Australia rose by 50.72 per cent to $15.04 billion. China’s trade deficit with Australia widened by 75.88 per cent to $9.07 billion.

“September exports beat even our above-consensus expectations. Coupled with separate data showing that electricity consumption held up well last month, this suggests that the hit from power rationing has largely been confined to a few energy-intensive industries and did not hold back wider manufacturing activity as many had feared,” according to Capital Economics.

“The resilience of exports adds to growing evidence that power shortages did not deal much of a blow to China’s manufacturing sector last month. The National Energy Administration published data showing that growth in electricity consumption in industry rose from 0.6 per cent year on year in August to 6 per cent last month, implying a pickup in seasonally adjusted month-on month terms.