China’s export growth likely picked up speed in Oct on better weather, discounts: Reuters poll

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2024.11.05 23:57

BEIJING (Reuters) – China’s outbound shipments likely rose at a faster pace in October, buoyed by better weather and steep discounts even as manufacturers and other major exporters report a drop off in global demand.

Trade data for October is expected to show exports grew 5.2% year-on-year by value, according to the median forecast of 34 economists in a Reuters poll, up from a 2.4% increase in September

Imports likely shrank 1.5% last month, more than reversing a 0.3% gain in September. The data will be released on Thursday.

Analysts suspect factory owners are still slashing prices to find buyers and that better weather last month enabled producers to send out delayed orders, with trade data from South Korea and Taiwan pointing to cooling global demand.

German manufacturers have also reported they are struggling to find buyers overseas.

Moreover, Chinese factory owners have been rushing out orders ahead of the U.S. presidential election, which is almost certain to result in more American curbs on Chinese goods, whoever wins.

But they have also had help from a positive turn in the weather.

“We believe exports rebounded from the disruptions in September, notably extreme weather events,” said Xu Tianchen, senior economist at the Economist Intelligence Unit, which forecast an increase of 6.5%, one of the highest.

Natural disasters, from super typhoons to floods, cost China 230 billion yuan ($32.23 billion) in direct economic losses over the third quarter, according to data from the Ministry of Emergency Management.

In contrast, Barclays (LON:) expects China’s export growth to have slowed further last month, with the lowest forecast of just 2%.

An official factory activity survey for October showed producers still felt they were receiving fewer orders from overseas.

But manufacturing activity as a whole expanded for the first time in six months, with factory owners reporting an uptick in overall orders, pointing to improving domestic demand.

South Korea’s exports to China, a leading indicator of the $19 trillion economy’s imports, jumped 10.9% to a 25-month high.

Export momentum has been one bright spot for the Chinese economy that has struggled to grain traction due to weak domestic demand and a property market debt crisis.

But economists have cautioned Chinese policymakers against becoming too reliant on outbound shipments for growth and urged officials to introduce more stimulus.

Analysts are now turning their attention to a $1.4 trillion fiscal package officials are likely to sign off on this week, which they expect to stabilise local government and property developers’ balance sheets and ease the strains that have weighed on consumption.