China Export Rises 5.6% in Oct, Global Demand Fix up

China’s exports rebounded by more than estimated last month and the trade surplus widened to the biggest this year, helping sustain an economic recovery as leaders gather to map out a blueprint for growth.

Overseas shipments increased 5.6 percent in October from a year earlier, the General Administration of Customs said on 8 November in Beijing, compared with a median estimate for 1.7 percent growth in a News survey and September’s unexpected decline of 0.3 percent. Imports rose 7.6 percent, leaving a trade surplus of $31.1 billion, the biggest this year.

Stronger global demand suggested in today’s report may bolster confidence that Premier Li Keqiang will meet this year’s 7.5 percent growth target and ease pressure on the government to spur domestic consumption and investment. President Xi Jinping, who will lead a four-day summit starting on 9 November to decide on reform measures, said growth must avoid straining resources, capital and markets, the Xinhua News Agency reported on Nov. 5.

“China’s export numbers suggest some -- although not yet decisive -- improvement in global demand momentum,” Louis Kuijs, chief China economist at Royal Bank of Scotland Group Plc in Hong Kong, said in a note. Import figures reflect “healthy expansion of demand” within China, he said.

The export growth figures understate the true picture by about 2 percentage points because of inflated data from over-invoicing in the second half of 2012 and first half of 2013, Kuijs said. Regulators in May cracked down on fabricated paperwork for outbound shipments used to disguise capital inflows.

October’s trade surplus takes the total for this year to $200.5 billion, the biggest 10-month total since 2008 and compared with $230.7 billion for the whole of 2012.

Yuan Pressure

The increase in the surplus suggests that pressure will build for the yuan to appreciate, Liu Li-Gang, chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong, said in a note.

The currency has appreciated about 2.3 percent against the dollar this year, the most among 11 major Asian currencies. It weakened 0.04 percent to 6.0930 per dollar on 8 November.

Premier Li’s comments about the importance of exports suggest “the Chinese authorities are concerned about declining trade competitiveness” due to the strengthening yuan and rising costs, Liu wrote.

Exports to the U.S., China’s largest market, rose 8.1 percent in October from a year earlier, today’s data showed, the biggest jump since February. Figures from the U.S. showed fewer Americans filed applications for unemployment benefits last week, the economy expanded in the third quarter at a faster pace than forecast and consumer credit rose more than projected.

Car Exports

China’s sales to the European Union, its second biggest market, jumped 12.7 percent last month, the biggest gain since February, customs data showed.

Geely Automobile Holdings Ltd. (175), the publicly traded unit of China’s largest closely held carmaker, said this week that the volume of its exports in October rose 17 percent from a year earlier.

October’s export growth wasn’t “a terribly strong number”because the three-month average still showed a relatively stable export sector, said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong.

Imports for general trade, which refers to goods used in China’s own economy rather than for re-export, rose 18.5 percent in October from a year earlier, today’s data showed. That’s the biggest increase in at least 18 months.