China Posts Record Surplus: Exports Up 9.4%, Imports Shrink

Exports rose 9.4 percent in August, the Beijing-based General Administration of Customs said on Monday, beating an estimated rise of 8 percent however it is slower than July's 14.5 percent growth rate.

Exports rose 9.4 percent in August, the Beijing-based General Administration of Customs said on Monday, beating an estimated rise of 8 percent however it is slower than July’s 14.5 percent growth rate.

China’s exports climbed to a record surpassing earlier forecasts in August with increased shipments to the U.S. and Europe, while imports sunk out of the blue, pushing the trade surplus to a record high for the second consecutive month and underlining the difficulties confronting policymakers as they battle to revitalize unenthusiastic local demand.

Exports rose 9.4 percent in August, the Beijing-based General Administration of Customs said on Monday, beating an estimated rise of 8 percent however it is slower than July’s 14.5 percent growth rate. Yet imports fell 2.4 percent as far as value is concerned, which led to a record-breaking high trade surplus of $49.8 billion, surpassing figures for a surplus of $40 billion.

It was the second in a row month that China’s import development has been suddenly frail, raising worries that slow local interest aggravated by a cooling housing market is progressively delaying development on the world’s second-largest economy.

The deepening contraction in the import data indicated weak domestic demand,” said Li Huiyong, an economist at Shenyin Wanguo in Shanghai.

The trade data indicated downward pressure on China’s economy. Policymakers may need to enhance their efforts to support the domestic economy if industrial output growth slows to 8.6 percent in coming months.”

China’s economy has had an uneven ride in the recent months. Growth slumped to a 18-month low of 7.4 percent in the first quarter and bounced back just marginally to 7.5 percent in the middle of April and June after a whirlwind of government stimulus measures. Yet, there has been hope that recovery may pick up from where it was at a halt in July when data demonstrated that the economy was losing momentum again. Subsequently, officials have over and again cautioned that China may miss its target to grow its trade sector by 7.5 percent in 2014.

China’s export domain was upbeat in July when growth rose to a 15-month high, pushing the trade surplus to a record $47.3 billion. The optimistic performance was aided partially by a reinforcing U.S. economy, China’s top export destination. However, risks by the cooling property sector have taken the light off any optimistic thoughts brought on by perkier foreign interest.

Representing around 15 percent of China’s financial yield, the real estate sector is encountering its most noticeably awful downturn in two years as deals and prices turned south.

The housing sunk, consolidated with a startling drop in credit supply a month ago to a six-year low, has forces numerous analysts to expect that China’s leaders need to release approach further and offer further boost so as to meet this current year’s financial growth target of around 7.5 percent.

The continued weakness in imports highlights the soft domestic demand and fragile growth recovery in China,” said Jian Chang, chief China economist at Barclays Plc in Hong Kong.

To stoke action, China began slackening policy with modest steps from April. Some construction activities were brought forward, the amount of deposits that banks must put aside as reserves was brought down for a few lenders, and property controls were relaxed to help the housing business.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

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