Chinese exports and imports grew much less than expected in September

BEIJING – China’s exports and imports both fell short of expectations in September, raising concerns about one of the few bright spots in the world’s second-largest economy.

Customs data Monday showed that exports rose 2.4% in September from a year ago, measured in US dollars, while imports rose 0.3%.

Analysts had expected faster growth. Chinese exports were expected to rise 6% year-on-year in September in US dollar terms, while imports were expected to rise 0.9% year-on-year last month, according to Reuters polls.

Exports have been a key driver of growth in China’s economy, which has been under pressure in recent years due to sluggish consumer spending and a slump in the real estate sector.

But increased trade tensions will make it difficult for China’s exports to continue growing at a strong pace next year, Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note. “The change in fiscal policy, as indicated by last weekend’s press conference, is crucial as a pillar for growth next year.”

The US and the European Union, among other things, have increased tariffs on electric cars made in China.

Chinese exports to the US, its largest trading partner, rose 2.2% in September from a year ago, while imports from the US rose 6.7%, according to CNBC’s analysis of official data.

“Import volumes fell last month but are likely to pick up in the near term as faster fiscal spending boosts demand for industrial raw materials,” Zichun Huang, China economist at Capital Economics, said in a note on Monday.

“We think the increase in budget spending by the Ministry of Finance will stimulate construction activity and increase demand for industrial raw materials, at least for a quarter or two,” Huang said.[thefinanceministry’sincreaseinfiscalexpendiurewillboostconstructionactivityanddrivehigherdemandforindustrialcommoditiesatleastforaquarterortwo”Huangsaid[thefinanceministry’sincreaseinfiscalexpenditurewillboostconstructionactivityanddrivehigherdemandforindustrialcommoditiesatleastforaquarterortwo”Huangsaid

China’s Finance Ministry had hinted on Saturday at plans to widen the budget deficit, without commenting on the size of such support at the time.

Exports to the Association of Southeast Asian Nations, China’s largest trading partner on a regional basis, rose 5.5%, while imports rose 4.2%. Chinese exports to the European Union rose 1.3%, while imports fell 4%.

Chinese exports to BRICS partner Russia rose 16.6%, but imports fell 8.4%, the analysis showed.

Growth in total Chinese car exports slowed to 25.7% year-on-year in September, while those of shoes, toys and smartphones all fell over the same period. Home appliances, integrated circuits and ships were among the categories that showed export growth.

In another sign of weak domestic demand, China’s crude oil imports fell 10.7% in US dollar terms in September compared to the same period last year, while imports of natural gas and coal both rose.

The latest data reflects Beijing’s efforts to strengthen food supplies and access to rare earths to ensure national security. China’s trade in rare earths shrank further, with exports falling more than 40% in September from a year ago, and imports falling about 9%.

The intake of soybeans, an important ingredient in livestock feed, increased by almost 39%.

The data adds to a gloomy picture of the Chinese economy, with Sunday’s inflation print pointing to further weakness in domestic demand.

The main consumer price indexwhich excludes more volatile food and energy prices, rose 0.1% in September from a year ago. That’s the slowest since February 2021, according to the Wind Information database. Tourism-related prices fell 2.1% year-on-year, despite the Mid-Autumn Festival in September and the Golden Week that started on October 1.

China’s National Bureau of Statistics is expected to release third-quarter GDP data on Friday, along with retail sales, industrial production and fixed asset investment for September.

Chinese authorities have stepped up stimulus announcements since late last month, but have so far fallen short on the fiscal policy details that many investors had hoped for. Stock prices in China have soared as beaten markets debate the ultimate impact of Beijing’s economic support.