China August exports beat forecasts, point to stabilization

Sat Sep 7, 2013 11:11pm EDT
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BEIJING (Reuters) - China's exports rose more than expected in August, boosted by improving demand for the country's goods in major markets and adding to evidence that the world's second-largest economy may have avoided a sharp slowdown.

The Customs Administration said on Sunday that exports rose 7.2 percent in August from a year earlier and imports rose 7 percent, leaving the country with a trade surplus of $28.6 billion for the month.

The figures compared with market expectations in a Reuters poll of a rise of 6 percent in exports, an 11.3 percent rise in imports and a trade surplus of $20 billion.

"China's August trade sustained the upward trend seen since July, in line with accelerating growth momentum and improving market sentiment, pointing to an upside bias in Q3 GDP growth," ANZ economists Liu Li-Gang and Zhou Hao said in a note after the data.

After slowing in nine of the past 10 quarters, the world's second-largest economy has shown signs of stabilization, with surprisingly firm rebounds in trade in July and surveys in the last week showing manufacturing regaining momentum and growth in the services sector at a five-month high.

Investors had as recently as a month ago worried that China's economy was slipping into a deeper-than-expected downturn, especially after its money market suffered an unprecedented cash crunch in June.

But policymakers have stepped in with measures to steady the economy, from quicker railway investment and public housing construction to introducing policies to help smaller companies with financing needs.

Attention now turns to other data for August due in the next two days, with investors looking to figures for industrial output, inflation, money supply and investment to further gauge the impact of those measures. Gross domestic product data for the third quarter is due in October.

A Reuters poll shows factory output is expected to have grown an annual 9.9 percent in August, matching the January/February figure as this year's biggest increase, while investment should tick up and inflation stays muted.   Continued...

A worker rides his bicycle past piles of steel coils for export at a port in Yingkou, Liaoning province August 9, 2013. REUTERS/Stringer