China’s trade surplus widens in September
BEIJING — China’s trade surplus widened more than expected in September as exports surged, keeping the country on track to surpass last year’s record surplus and likely intensifying trade tensions with major partners, reports BritPanorama.
Global demand for semiconductors and green-tech products has helped keep China’s factories humming, easing pressure on policymakers to shore up economic growth against subdued domestic demand and investment.
Exports soared 36.3% compared with a year earlier, outstripping August’s 25% rise and far exceeding expectations for 25.5% growth, customs data showed Wednesday. September’s growth was the fastest since February, when exports expanded 39.6%.
Imports also demonstrated resilience, increasing by 31% compared to 28.2% growth in August and surpassing economists’ forecasts of a 24.5% gain.
Wang Jun, a vice customs minister, indicated at a news briefing that while external uncertainties, including geopolitical conflicts, might affect trade, there is a foundation and support for continued growth in exports and imports in the fourth quarter.
Analysts expect trade to remain buoyant, with tech products continuing to drive exports and imports. “Key trade ties look set to remain stable through year-end, which should keep this year’s key growth engine humming,” said Lynn Song, ING’s chief Greater China economist.
China’s yuan held steady against the dollar on Wednesday, bolstered by solid export data, while stocks fell.
The trade surplus reached $938.11 billion in the first nine months of this year, positioning the manufacturing powerhouse to hit the $1 trillion mark sooner unless exports slow sharply in the fourth quarter. For now, such a slowdown appears unlikely.
September’s trade surplus widened to $133.53 billion, significantly aided by a 20-month-high $34.01 billion surplus with the United States and a larger $34.8 billion surplus with the European Union.
A deal with the EU to limit Chinese exports of hybrid vehicles to the bloc, announced earlier this month, is likely to weigh on China’s booming auto trade over time. However, with trade measures expected to be defined in December, exporters may increase shipments to beat the deadline.
“The widening trade surplus with Europe could spur broader EU restrictions beyond last week’s narrow deal, though we expect the resulting economic fallout for China to be small,” said Nguyen Hoang Nam, China economist for Capital Economics.
President Xi Jinping’s September summit with President Donald Trump in Washington secured an extension to their tariff truce and an agreement to cut tariffs on $30 billion worth of goods from each side.
High-tech goods and cars continued to underpin shipments, with semiconductor exports rising 108.1% year-on-year in value terms in the first nine months. Auto exports expanded more than 50% in both value and volume terms.
As demand for Chinese-made technology products, including semiconductors, remains robust amid a global build-out of AI infrastructure, analysts anticipate sustained sales growth.
China’s factory-gate prices rose at their fastest pace in over four years in September, as separate data indicated that consumer inflation also edged up but lagged behind forecasts, underscoring an uneven recovery.
The Canton Fair, China’s largest trade exhibition, starts Thursday, allowing Chinese manufacturers to showcase their products to foreign buyers.
In commodities, September crude oil imports fell 21.5% year-on-year in volume terms, while soybean imports decreased by 7.7% compared with the same month last year.
The strength in exports suggests that policymakers could still rely on moderate policy support to meet China’s annual GDP growth target of 4.5% to 5%.
Concerns about potential curbs on Chinese exports persist as China defends its industrial and monetary policies, which Washington and Brussels attribute to Beijing’s considerable trade surplus.
China’s central bank recently countered criticism of its exchange-rate policy, clarifying that it never pursued competitive depreciation and rejected claims that it intentionally keeps the yuan weak for trade advantages.
Any significant decline in exports, a crucial growth driver, could compel policymakers to implement additional stimulus measures to tackle weak domestic demand and the ongoing property market downturn.
