China’s Exports Haven’t Grown This Fast in 18 Months

China’s foreign trade continued to recover from the Covid-19 pandemic in September, with exports expanding at the quickest clip in 18 months and imports returning to growth at their fastest pace so far this year, boosted by a global economic rebound and robust domestic demand.

Goods exports grew 9.9% year-on-year in dollar terms to $239.8 billion last month, up from 9.5% growth in August, marking the fastest expansion since March 2019, according to data (link in Chinese) from the General Administration of Customs released Tuesday. The reading was slightly lower than the median forecast for a 10% rise in a Caixin survey (link in Chinese) of economists.

The performance was mainly driven by shipments of products related to the Covid-19 pandemic, including medical supplies and products for working from home such as laptops and home appliances, as well as China’s relatively rapid resumption of domestic production, multiple economists said.

In the January-September period, exports of medical devices jumped in value by 44.3% (link in Chinese) year-on-year, slightly down from a 46.1% rise (link in Chinese) in the first eight months. During the same period, exports of textiles, including face masks, rose 33.7% year-on-year in value, close to 33.4% growth in the January-August period.

Meanwhile, excluding pandemic-related exports, global demand showed signs of continued recovery, economists at HSBC Global Research wrote in a note.

“The big picture is that outbound shipments remain strong, with easing demand for COVID-19 related goods such as face masks being mostly offset by a recovery in broader demand for Chinese-made consumer goods,” economists at research firm Capital Economics Ltd. said in a note.

While noting renewed virus outbreaks in other countries will be a challenge, Louis Kuijs, an economist at Oxford Economics Ltd., expected the uptrend in Chinese exports to continue due to shipments of products benefiting from virus-related demand.

Official data show that China’s imports surged 13.2% year-on-year to $202.8 billion in September, reversing a 2.1% decline the previous month and marking the highest growth since December. The reading beat the Caixin survey’s median forecast of 0.7% growth.

The sharp rebound in imports was driven by continued recovery of domestic demand, several economists said, with pent-up construction activities back on track in September after devastating floods.

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China’s trade with major partners saw improvements last month. Exports to the U.S. dropped 0.8% year-on-year (link in Chinese) in the first nine months, milder than a 3.6% fall (link in Chinese) in the January-to-August period.

Imports from the U.S. increased 0.2% year-on-year in the first three quarters, easing from a 2.9% decline in the first eight months, as China worked toward meeting its phase-one trade deal commitments in which it promised to increase its purchases of U.S. goods and services.

Contact editor Gavin Cross (gavincross@caixin.com)

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