World Economy

China's export engine may have stalled in September

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China's export engine is expected to have stalled in September reflecting the subdued recovery in the global trade cycle, say economists.

The country's trade data, which is due to be published on October 12, is projected to show exports rising 6 percent on-year in September, down from 7.2 percent in the previous month, according a Reuters poll. Meanwhile, imports are forecast to have grown 7 percent, the same growth rate as August.

"While trade both ways looks a little better than it did a few months ago, we haven't seen the kind of quick recovery to strong growth rates that we saw in earlier economic recoveries," said Louis Kuijs, chief China economist at RBS.

(Read more: Week ahead for Asia: China back in action)

"This is because the recovery in developed countries - the U.S., Europe and Japan - isn't as import intensive due to the household de-leveraging, and fiscal consolidation taking place. This is a bit of dampener on the global trade cycle, and impacts Asian exporters like China," he said. The U.S. is a major market for Chinese goods, accounting for around one-fifth of overall exports.


China's 7%  growth threshold
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China's 7% growth threshold

Neighboring South Korea and Taiwan saw an unexpected fall in exports in September.

South Korea's exports dropped 1.5 percent - the first decline in three months - after rising 7.7 percent in August. Taiwan's exports fell 7 percent, after rising 3.6 percent in the previous month.

This poses some downside risk to forecasts for China's exports, say economists, given the correlation in exports among North Asian economies.

(Read more: China will get old well before it gets rich)

Raymond Yeung, senior economist, Greater China at ANZ said part of the expected slowdown in exports could be attributed to the timing of a national holiday - the Mid-Autumn Festival - which fell from Thursday, September 19 to Saturday, September 21 this year. In 2012, the holiday began on Sunday, September 30 and continued into October.

Discussing the implications of the U.S. government shutdown on Asia's export sector, analysts say it's unlikely to have a major impact just yet.

(Read more: China wonders: Why do we own so much U.S. debt?)

"It depends on how long the shutdown drags on and if there is a government default," said Yeung. "The longer the shutdown drags, the more severe the impact will be on consumer confidence... and that will eventually hurt China's manufacturing sector and entire supply chain in Asia."

CNBC's Ansuya Harjani; Follow her on Twitter @Ansuya_H