China’s exports rose more than estimated in October, signaling foreign demand may help sustain an economy forecast to grow at the slowest pace since 1990.
Overseas shipments increased 11.6 percent from a year earlier, exceeding the 10.6 percent median estimate in a Bloomberg News survey of analysts. Imports rose 4.6 percent, compared with projections of 5 percent, leaving a trade surplus of $45.4 billion, the customs administration said Saturday.
Recoveries in the US and Europe are underpinning growth, with the two regions accounting for almost a third of shipments. Exports to Hong Kong, which then go to other destinations, surged 24 percent in October. Disparities in bilateral trade data published by China and Hong Kong have raised concerns of fake invoicing, which is used to evade controls on the flow of capital into the mainland.
“The US recovery is pretty strong so China exports are holding up,” said Hu Yifan, chief economist at Haitong International Securities Group Ltd. in Hong Kong. “There might still be some fluff in the trade numbers due to fake invoicing, but there won’t be severe fake trade like that of last year.”
The exports reading follows a 15.3 percent jump in September. October’s trade surplus was forecast at $42 billion, following a $30.96 billion figure for September.
Bumpy Recovery
Exports in October to members of the Association of Southeast Asian Nations grew 18 percent from a year earlier, Saturday’s data showed. Shipments to Japan declined 8.1 percent.
“The global economy is going through a bumpy and torturous recovery,” Chinese Central Bank Governor Zhou Xiaochuan said at a conference in Beijing Saturday. “The momentum of growth is still far from being adequate and we still have a long way to go to achieve sustainable and balanced growth.”
China’s economy will probably grow 7.4 percent this year, the slowest full-year expansion since 1990, according to a Bloomberg survey. Expansion in the third quarter was 7.3 percent, with growth for the first nine months at 7.4 percent.
In September, the gap between China’s reported exports to Hong Kong and the territory’s imports from the mainland widened to the most this year, suggesting fake export-invoicing is again skewing China’s trade data. Hong Kong is a major channel for those seeking to exploit yuan appreciation or higher interest rates in China by disguising money inflows as payment for goods exported to foreign countries or territories.
Precious Metals
China’s government sent a team to Guangdong province to investigate a seven-fold increase in September precious-metals exports, which have been at the center of questionable invoicing in the past, people familiar with the matter said last month. In October, precious-metals exports slumped to $4.9 billion from September’s $10.8 billion. That was still almost three times the amount of shipments in October 2013.
“Overseas sales are resilient – though not as strong as the headline data suggest,” Bloomberg North Asia economist Tom Orlik wrote in a note, citing the effect of invoice exaggeration on October exports. Today’s data “will do little to shift the government’s commitment to moderate targeted easing, as opposed to overblown stimulus.”
