Daily Management Review

October Exports For China Likely Was Strong Due To Strong Global Demand


October Exports For China Likely Was Strong Due To Strong Global Demand
There was likely a slight fall in China's export growth in October, according to a Reuters poll released on Friday, but still was strong enough because of sustained global demand, easing out of the issues in the global supply chain, and a reduction in the power shortage in the country, while imports climbed on higher energy demands.
It is expected that there was a 24.5 per cent year on year rise in exports in October, according to the consensus projection of 22 analysts polled, after it increased by a higher, 28.1 per cent, in September.
According to the survey, there was also a likely 25 per cent year on year rise in imports in October, while it was at 17.6 per cent in the previous month of September, which was primarily because of increased oil prices and increased imports of coal by China to safeguard power supply prior to the setting on the winter.
"Peak consumer demand during the holiday season in Europe and the United States drove the exports of consumer goods in October. And pre-emptive buying from corporates in response to the supply chain-related delivery delays has been strong," said analysts at Industrial Bank said in a note.
The experts and economists however also cautioned that a high base compared to the same month in the previous year could also be the reason for the slight slowdown in export growth.
There was also double-digit export growth in October in South Korea, driven primarily by the recovery in various key markets after lifting of the Covid-19 pandemic induced lockdowns, which increased demand for Korean semiconductors and petrochemical products.
China has been able to make a significantly fast recovery from the pandemic hit even though there are concerns that the recovery is stalling, as seen by weaker industrial development, a frozen property market, and chronically low consumption.
According to an official survey, there was a drop in factory activity in October which was a second straight month of drop. Industrial production growth also slowed to its lowest level since March 2020 when the first wave of the pandemic was ongoing.
The Chinese government will bring in changes to its policies in an effective manner to deal; with the consistent economic weakness and market issues, said Chinese Premier Li Keqiang on Tuesday.
A significant impact on supply chains in a vast section of China has been witnessed because of the recurrence of the Covid-19 epidemic, according to analysts.
"We do not expect the COVID resurgence to result in meaningful supply chain disruptions or export price reflation," analysts at Morgan Stanley said in a note on Thursday