China's September exports in surprise slump
China's export growth fizzled in September to post a surprise fall, data showed, a disappointing end to a recent run of indicators that had signaled the world's No. 2 economy gaining strength.
The Customs Administration said on Saturday China's exports dropped 0.3 percent in September from a year earlier, sharply confounding market expectations for a rise of 6 percent, and marking the worst performance in three months.
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Imports rose 7.4 percent last month from a year ago, a shade better than forecasts for a 7 percent rise, leaving China with a trade surplus of $15.2 billion for the month. Analysts had expected a trade surplus of $27.7 billion.
Customs officials did not immediately explain the unexpected drop in exports, but Liu Li-Gang and Zhou Hao, economists at ANZ Bank, said the volume of cargo moved at Chinese ports had indeed slowed in September, in part due to a stronger yuan.
Activity was further hurt by the Mid-Autumn festival, which fell in the middle of September this year, reducing the number of working days in the month compared to 2012.
"The strong renminbi has eroded China's export competitiveness," ANZ Bank said in a note. "We would like to highlight that downside risks to China's economy remain."
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The dismal exports performance comes after the Chinese economy had showed encouraging signs of stabilization, having fought a slowdown that lasted more than 12 quarters.
Yet despite the pick-up in activity, economists have warned that a recovery may be fragile and brief, especially if Chinese leaders keep their promise to push through financial reforms, which are likely to crimp growth in the near term.
Attention now turns to third-quarter gross domestic product data and other figures for September due next week.
The median forecast of 21 economists in a Reuters poll showed economic growth is expected to quicken to 7.8 percent in the third quarter from a year ago, up from 7.5 percent in the previous three months.
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In the face of the economy's unsteady recovery, China's government has repeatedly expressed confidence that the nation is still on track to meet its 2013 growth target of 7.5 percent.
Central Bank Deputy Governor Yi Gang was quoted as saying this week in Washington that China's annual economic growth this year could hit around 7.6 percent.