Chinese exports growth accelerates in October, imports rise

Main north-south railway line, Xinzheng, Henan, China. (Image by Gary Todd, Wikimedia Commons)

Chinese exports expanded faster than expected in October, providing support for the recovering economy and driving increasing demand for imports, which rose for a second straight month.

  • Exports increased 11.4% in dollar terms in October from a year earlier, while imports gained 4.7%, the customs administration said Saturday. That left a trade surplus of $58.4 billion for the month. Economists had forecast that exports would climb 9.2% and imports by 8.6%.
  • Exports to the U.S. rose 22.4% while imports expanded 32.9%, according to Bloomberg calculations, as China increases purchases in order to meet the targets set in the trade deal inked in January.

Key insights

  • China’s economic recovery likely continued in October, with early data showing ongoing expansion in manufacturing and a pickup in the services industry.
  • Strong exports have been a major support to that recovery due to international demand for medical gear and equipment for people to work at home. There may also be a boost from re-openings in other countries, although that may fade as major economies return to virus lockdowns.

What Bloomberg economics says…

“The unexpected acceleration in October exports suggests China’s exports are more resilient facing the renewed outbreak of the coronavirus across the world. The slowdown in imports may reflect a more seasonal impact, but growth for the second month in a row suggests a continued rebound in domestic demand.” — Chang Shu, chief Asia economist.

  • Export growth extended gains in October thanks to electronics exports including new iPhones, according to Xing Zhaopeng, an economist at Australia & New Zealand Banking Group. “Import slowed surprisingly, due to the moderation of crude oil and coal imports and the effect of fewer working days this year than in 2019 due to the extended national holiday,” he said.

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  • China’s exports of medical equipment grew the fastest of any category, up 43% in the first 10 months from a year earlier. That was followed by textiles, yarn, fabric and other related goods, which increased almost 32%.
  • Meat imports increased more than 75% in the first 10 months, while purchases of cosmetics and toiletries rose about 26%. Imports of grain were up 21%.

(With assistance from Tomoko Sato)

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