Disappointing China trade data spurs fears recovery may be faltering

Thu Oct 13, 2016 5:26am EDT
 
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By Yawen Chen and Kevin Yao

BEIJING (Reuters) - China's September exports fell 10 percent from a year earlier, far worse than expected, while imports unexpectedly shrank after picking up in August, suggesting signs of steadying in the world's second-largest economy may be short-lived.

The disappointing trade figures pointed to weaker demand both at home and aboard, and deepened concerns over the latest depreciation in China's yuan currency CNY=CFXS, which hit a fresh six-year low against a firming U.S. dollar on Thursday.

"This comes on the heels of weak South Korean trade data, and it definitely make us worry about to what extent global demand is improving," said Luis Kujis, head of Asia economics at Oxford Economics in Hong Kong.

Asian stocks tumbled to three-week lows and U.S. stock futures and Treasury yields fell after the data, while copper prices in London slipped. [MKTS/GLOB]

China's exports had been expected to fall 3 percent, slightly worse than in August, as global demand for Asian goods remains stubbornly weak despite heading into what is usually the peak year-end shopping season.

Weaker demand for Chinese goods was seen in nearly all of its major markets in the U.S., Europe and much of Asia.

Imports shrank 1.9 percent, dashing hopes for a second rise in a row. Imports had unexpectedly grown 1.5 percent in August, the first expansion in nearly two years, on stronger demand for coal and commodities such as iron ore which are feeding a construction boom.

That left China with a trade surplus of $41.99 billion for the month, the lowest in six months, the General Administration of Customs said on Thursday. Analysts had expected it to expand slightly to $53 billion.   Continued...

 
Container boxes are seen at the Yangshan Deep Water Port, part of the Shanghai Free Trade Zone, in Shanghai, China September 24, 2016.  REUTERS/Aly Song/File Photo