Data released in October seemed to indicate some respite from the year’s dismal trade news. September exports fell 15.2% year-on-year, the slowest decrease in nine months. Imports fell by 3.5%. While still negative, economists said the data suggested the export environment might be growing less hostile.
"In exports, the worst is over. It has started to improve at the margin sequentially," said Wang Tao, chief China economist at UBS.
Some analysts cautioned against reading too much into the figures, however. A lack of seasonal adjustment makes focusing on a single monthly number problematic; one-off factors such as holiday timing can have a material affect on data. Merrill Lynch economists Lu Ting, T.J. Bond and Zhi Xiaojia wrote in a recent note that, adjusted for an extra two working days this September, export and import growth in September came in at -20.1% and -11.4%, respectively.
After a shorter October, November’s monthly trade figures are also likely to be distorted due to the very low base against which they will be measured. In November 2008, exports slowed 2.2% year-on-year, from 19.2% growth the month before.Still, third-quarter export growth was higher than in the previous quarter, supporting the idea that exports are warming, said Wang.
Gradual improvements have been helped along by Beijing’s intervention in currency valuations, which has seen the renminbi weaken alongside the US dollar against the euro. However, economists say currency fluctuations take some time to trickle through, and are less important than fundamental demand. A real recovery in exports will therefore require a recovery in global markets.
Encouragingly on this front, China’s shipments to the US were up a seasonally adjusted 12.6% in the third quarter, while shipments to the EU rose 22.1%.