BEIJING — Surprisingly strong rebounds in China’s exports and imports in July offered some hope that the economy might be stabilizing, government data showed Thursday, after more than two years of slowing growth, although an imminent rebound still looks improbable.
Data from the Customs Administration showed exports had risen 5.1 percent in July from the same month last year. Analysts had expected a 3 percent rise. It was a sharp turnaround from June, when exports had declined for the first time in 17 months.
Exports to the United States rose at an annual rate of 5.3 percent and those to Europe were up 2.8 percent, as China’s two biggest markets posted their strongest gains since February. Shipments to Southeast Asia were also up.
Imports fared even better, with a 10.9 percent jump from a year earlier, more than five times what analysts had forecast. The surprising strength in imports left China with a smaller-than-expected trade surplus of $17.8 billion.
“July seems to reflect a return to a ‘normal,’ relatively uninspiring trend,” analysts from Moody’s said in a note. “In other words, while the worst seems to be over, the upturn will be relatively flat.” Exports in the three months ended July 31 posted the slowest annual increase since October 2009, a Reuters calculation showed.
Imports of crude oil and iron ore rebounded from multimonth lows to record highs last month, as more raw materials were shipped in to rebuild depleted stocks, and soybean purchases hit a record for a second month.
A steadying of the economy would be a relief to China’s leaders, who have scrambled to shore up growth in the past couple of months. There had been concerns that a sharp slowdown could derail their attempts to shift the economy to being driven more by consumption than debt-funded investment and manufacturing.
Asian stocks rebounded on the data on hopes that Chinese demand might have found a floor.
China’s trade performance has whipsawed this year after figures were inflated by companies reporting fake deals to disguise illicit cash transfers, and then subsequently deflated by the government as it quashed the fictitious transactions.
Analysts said the July data probably had minimal distortions, but some cautioned against concluding that the upbeat performance had been driven by an actual improvement in final demand.
Commodity imports rose sharply last month, with iron ore purchases jumping 17 percent from June. Some commodity analysts said July shipments may have been inflated by unprocessed deals from June.
“I would think it has something to do with the fact that the June number was low and there was some catch-up tonnage coming through,” said Graeme Train, analyst with Macquarie in Shanghai.
Soy imports also hit a record high for the second straight month, though again analysts said that was partly due to delayed shipments finally arriving from congested Brazilian ports.
Crude oil imports, on the other hand, were likely lifted by refiners replenishing stocks after a three-month lull and as some new refineries started business.
“The monthly data is very volatile. I wouldn’t read too much into it and say that domestic demand is strong,” said Zhang Zhiwei, an economist at Nomura in Hong Kong.
Exports to the United States rose an annual 5.3 percent and those to Europe were up 2.8 percent, as China’s two biggest markets posted their strongest gains since February. Shipments to southeast Asia were also up on the year.
With the United States economy showing signs of a gradual recovery, Ting Lu, an economist at Bank of America-Merrill Lynch, said Chinese exporters could benefit further in coming months.
The trade figures were seen as a positive sign for industrial output data on Friday, with economists expecting production to show an annual rise of 9 percent in July.
Fixed asset investment is forecast to have risen 20 percent in the first seven months of the year, in line with growth in the first six months, while inflation is forecast to have quickened to a five-month high of 2.8 percent.
Top leaders in Beijing have made clear they will accept a slowdown in growth as they restructure the Chinese economy, but have indicated that annual growth should not be allowed to slip below 7 percent.
The economy has slowed in nine of the past 10 quarters, but the government has stressed it is confident of meeting its 7.5 percent growth target this year — the lowest in 23 years.
Article source: http://www.nytimes.com/2013/08/09/business/global/trade-data-from-china-suggests-more-stability.html?partner=rss&emc=rss