China’s Imports Rise Sharply, While Export Growth Slows

BEIJING — China imports rose sharply in October while export growth continued to slow, according to data released Thursday that suggest robust domestic demand could offset the effects of weakening demand for Chinese goods in Europe and elsewhere.

The stronger-than-expected import data may also reflect inventory buildups as Chinese importers took advantage of price swings to stock up on crude oil, copper and other commodities, analysts said.

Over all, imports rose a surprising 28.7 percent, compared with levels a year ago, far surpassing an increase in September of 20.9 percent.

Export growth continued to moderate, rising 15.9 percent over levels of a year ago. Economists said the data — the weakest in eight months — reflected continued economic turmoil in Europe.

Shipments to Europe grew 7.5 percent compared with the level of a year earlier, down from an increase of 9.8 percent in September, Barclays Capital said in a note.

Growth in exports to the United States rebounded, increasing 14 percent in October compared with the level of a year earlier, UBS Securities said in a note. Increases in exports to the United States in the previous few months had risen 10 percent to 11 percent, the investment house said.

While the import data were surprisingly strong, Yang Lingxiu, a Barclays Capital economist, said the export data were not alarming. “The external weakness will influence growth in China but it is not a great slowdown,” he said. “It is a moderation in momentum.”

Goldman Sachs said in a note that while exports were significantly down from the first half of the year, the data indicate “external demand has not deteriorated further” since July.

Chinese officials presented a more dire view. “What we’re facing now is a grave situation for exports and slowdown is inevitable in the third and fourth quarters,” Zhang Yansheng, director of the Institute for International Economics Research of the National Development and Reform Commission, said, according to a report by Xinhua, the state-run news agency.

Mr. Zhang, China’s top economic planner, attributed the moderation in economic growth to shrinking external demand, rising costs, liquidity problems and the gradual appreciation of the renminbi. He said that China also faced the risk of trade-protection measures in Europe and the United States, which says that China keeps its currency weak against the dollar to lower the price of its exports.

According to Barclays Capital, while Chinese exports this year are expected to grow 20 percent, its trade surplus is likely to narrow to about 2.4 percent of gross domestic product, down from 3.1 percent in 2010. Chinese officials cite the slimmer surplus as evidence that the Chinese economy is more balanced and increasingly dependent on domestic demand from industrial and consumer sectors.

UBS Securities said, “For now, the weakening exports, strong imports and narrowing trade surplus should help China resist calls for a faster appreciation” of the renminbi.

Data released Wednesday also suggested that inflation in China was easing, with prices rising 5.5 percent in October compared with levels a year earlier. UBS Securities said the seasonally adjusted annual inflation rate had come down to 3.5 percent, a welcome drop for Chinese policy makers and consumers.

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