Chinese Imports-Exports Exceeded 3rd Quarter Expectations, but Analysts Warn of “Short-Lived” Growth
Rubi Valdez | | Oct 14, 2014 09:29 PM EDT |
(Photo : Reuters/China Stringer) Trucks drive past piles of shipping containers at the Qingdao port in Qingdao, Shandong province June 8, 2014. China's exports gained steam in May thanks to firmer global demand, data showed on Sunday, but an unexpected fall in imports signalled weaker domestic demand that could continue to weigh on the world's second-largest economy.
Chinese imports and exports surge higher than expected from the September data, the General Administration of Customs reported, an indicator of steady local and international markets. However, experts warn governments of a "short-lived" improvement and possibly more aggressive domestic demands despite current surge of demands from external markets.
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Based on statistics, this year's export income doubled at a rate of 15.3 percent amounting to US$213.7 billion compared with US$31 billion last year. Imports also soared at 7 percent totaling US$182.7 billion.
China's figures are surprisingly high and are even ahead of Dow Jones Newswires' 12.5 percent economic forecasts based on August numbers. Customs representative Zheng Yuesheng said that the growth in import-export indices is an indicator of recovery in major economies and is expected to continue until the fourth quarter.
In addition, China shares 14.5 percent (US$231.6 billion) of the total trade with European Union and 5.2 percent with United States. On the other hand, bilateral trades with Hong Kong declined 13 percent and up by 0.4 percent with Japan.
However, analysts like Julian Evans-Pritchard of Capital Economics urged governments to take extra precaution because increased imports cannot be interpreted as a full economic rebound. He added that the strength in numbers could be an effect of an aggressive, but momentary flow in import productions, which can result to oversupply if left mismanaged.
Nomura analysts added that China is facing greater demands in export products due to the popularity of Apple's iPhone 6. However, he clarified that this is not a sustainable source of long term income due to weakening European markets and geopolitical crises.
China is currently undergoing market restructuring and lowering real estate prices, thus resulting to an "economic plateau". The International Monetary Fund recently forecasts a 7.4 percent (2014) and 7.1 growth rate (2015), lower than Beijing's expectation of 7.5 percent growth this year.
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