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China’s Trade Surplus Climbs to Record in August

Sunday, September 7, 2014   (0 Comments)
Posted by: Jennifer Bivona
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China’s Trade Surplus Climbs to Record in August

By Bloomberg News Sep 7, 2014 10:13 PM ET

China’s trade surplus climbed to a record as exports rose in August, helping leaders counter a property slump that threatens growth in the world’s second-largest economy.

Overseas shipments increased 9.4 percent from a year earlier, the Beijing-based customs administration said today, compared with the 9 percent median estimate in a Bloomberg News survey. Imports unexpectedly dropped 2.4 percent, leaving a trade surplus of $49.8 billion.

Strength in exports contrasts with other indicators showing manufacturing pulled back in August and investment slowed and new credit plunged in July. A boost from overseas demand will reduce pressure on the government to step up stimulus measures as it copes with risks to its economic-growth target this year of about 7.5 percent.

Recent U.S. data showed “the recovery is clearly faster than expected, which helps to keep China’s exports at a healthy level,” Zhou Hao, China economist at Australia & New Zealand Banking Group Ltd. in Shanghai, said before the release.

The increase in exports follows a previously reported 14.5 percent jump in July and compares with analysts’ estimates for gains ranging from 4.9 percent to 17 percent. The median projection for imports was a 3 percent increase, after a 1.6 percent drop in July, and the trade surplus was forecast at $40 billion, following a previous record of $47.3 billion in July.

Today’s figures follow indications in data last week that manufacturing is slowing. The government’s Purchasing Managers’ Index fell to 51.1 in August and a similar gauge from HSBC Holdings Plc dropped to 50.2, both from 51.7 in July.

Apple Boost

Apple Inc.’s new version of the iPhone may boost China’s exports by about 1 percent a month for the rest of 2014, Bank of America Corp. economists led by Lu Ting in Hong Kong said in a note last week. The company tomorrow will announce a range of new products, including bigger-screen iPhones and a new wristwatch-like wearable device, according to people familiar with the plan.

Chinese factories’ sales growth to developing nations, which surged to help offset tepid demand from advanced economies since 2009, is now on the wane. Expansion in shipments to other emerging countries moderated to 9.7 percent last year, less than a third of the 2010 pace, according to data compiled by Bloomberg.

Data due in the coming days will fill out the picture of China’s economy in August. The National Bureau of Statistics will report on inflation on Sept. 11, followed two days later by industrial production, retail sales and fixed-asset investment.

The People’s Bank of China will provide figures on lending and money supply by the middle of the month, after July numbers showed a plunge in the nation’s broadest measure of new credit.

 


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