UPDATE 1-China's exports rebound in October, beat forecasts

Natalie Thomas
Thursday, 7 Nov 2013 | 10:19 PM ET

(Adds comment, details on data, party plenum)

BEIJING, Nov 8 (Reuters) - China's export growth rebounded by more than expected in October, adding to a run of indicators suggesting that the economy has found its footing as Beijing prepares to lay out its reform agenda for the next decade.

Exports increased by 5.6 percent in October from a year earlier, the Customs Administration said on Friday, beating market expectations for a 3.2 percent rise.

Imports rose 7.6 percent against forecasts of an 8.5 percent rise, leaving the trade surplus at $31.1 billion.

An upswing in exports adds to positive figures in surveys of the manufacturing and services sectors in October, though conflicting estimates in those surveys for new export orders pointed to a mixed outlook for trade.

"Combined with the better export data in Korea and Taiwan, China's export numbers suggests some -- although not yet decisive -- improvement in global demand momentum," said Louis Kuijs, an economist with RBS, in a note.

The export growth followed last month's surprise 0.3 contraction.

Attention will now turn to inflation and activity figures on Saturday which will give a clearer overall picture of the health of the economy. Data since mid-year has shown the economy has regained some momentum after a protracted slowdown.

A Reuters poll shows inflation is expected to rise to an 18-month high, retail sales and M2 money supply growth rates are seen edging up slightly, while investment and factory output tick down.

China's leaders have repeatedly said they are reshaping the economy so it is driven by domestic demand rather than exports and investment. Reforms to push that are expected to be unveiled at the Communist Party's third plenary session, a meeting of China's top 200 politicians running Nov. 9-12.

Exports have been a drag on the economy so far this year, subtracting 1.7 percent from growth in the first three quarters. Weak global demand, a stronger yuan currency and rising labour costs have taken their toll on sales of Chinese goods abroad.

Exports directly create about 30 million jobs and add another 100 million in related industries, according to official estimates.

(Editing by John Mair)