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Andrew Mullen

1. Export growth softens
The value of China’s exports grew by 2.4 per cent, year on year, to US$303.71 billion in September.
The figure was lower than the expected 6.18 per cent increase surveyed by Chinese financial data provider Wind and fell short of the 8.7 per cent rise recorded in August.
“Export growth slowed last month but remained resilient, with volumes still rising at a double-digit pace,” said Zichun Huang, China economist at Capital Economics.
“We think shipments will stay strong in the near term, supported by gains in export competitiveness.”


Customs spokesman Lu Daliang said the reading had been affected by “short-term incidental factors”, such as typhoons in port cities, a higher base last year, and global shipping congestion.
Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, noted how “export growth softened in September”.
“Some temporary factors, such as bad weather, likely played a role,” he said. “Nonetheless, China’s export growth has been remarkably strong this year and helped offset the weak domestic demand.”
2. Sluggish domestic demand drags imports
China’s imports rose in September by 0.3 per cent from a year earlier, compared with 0.5 per cent growth seen in August.
“In volume terms, imports appear to have declined,” added Huang at Capital Economics. “But we think they will recover in the near term.”
Sluggish domestic demand continued to drag import demand, with many categories such as agriculture, steel and cosmetics seeing contractions in growth through the first three quarters, said Lynn Song, chief economist for Greater China at ING.
Through the first three quarters of the year, China’s imports grew by 2.2 per cent, year on year, he added.
3. US surpasses EU as top destination
In September, China’s exports to the United States surpassed those to the European Union and the Association of Southeast Asian Nations (Asean) to become the top destination.
Exports to the US increased by 2.16 per cent in September, while shipments to the EU rose by 1.32 per cent.
China’s exports to the Asean bloc, meanwhile, rose by 5.48 per cent in September compared with a year earlier, while exports to Russia increased by 16.6 per cent.


4. Trade surplus falls
China’s trade surplus stood at US$81.71 billion in September, compared with US$91.02 billion in August.
“This lower surplus is expected to contribute less to third-quarter gross domestic product growth, which will be reported later this week,” added Song at ING.
5. CPI surprises on the downside
China’s consumer price index (CPI), a key gauge of inflation, fell in September, with analysts pointing to an increase in food inflation being outweighed by further decreases in energy and core inflation.
China’s CPI grew in September by 0.4 per cent, year on year, compared with an increase of 0.6 per cent in August, the National Bureau of Statistics (NBS) said on Sunday.
But the reading fell short of the expected 0.7 per cent growth projected by economists polled by Wind, with analysts saying the miss was mainly led by non-food price inflation turning negative, despite higher food-price inflation, on a shortage of supply amid adverse weather.


Food prices grew last month by 3.3 per cent, year on year, including a 22.9 per cent jump in vegetable prices and a 16.2 per cent increase in pork prices.
“CPI inflation surprised on the downside despite a pickup in food prices,” said analysts at HSBC.
“This is reflective of recent trends in softer consumption as seen in the weaker-than-expected retail-sales data and contractions in sales of discretionary products such as clothing and cosmetics.”
6. PPI falls for 24th straight month
China’s producer price index, which measures the cost of goods at the factory gate, deepened further on the back of worsening overcapacity after it slipped by 2.8 per cent in September, falling for the 24th consecutive month, compared with a decline of 1.8 per cent in August.
“Notably, consumer-durables prices, including that of cars and electronics, fell, which suggests that overcapacity could still be worsening,” said Gabriel Ng, assistant economist at Capital Economics.
The reading was worse than the 2.5 per cent decline forecast in a Wind poll.


“PPI deflation deepened due to weak domestic activity, particularly from the property sector, as well as softer global commodity prices,” said the analysts at HSBC.
They highlighted a drop in global oil prices, which was reflected in lower oil-related manufacturing PPI, while ferrous-metal-processing PPI also saw a steeper fall.
Sequential PPI inflation remained deeply negative in September at minus 0.6 per cent, month on month, up only marginally from minus 0.7 per cent in August, due to a continued broad-based decline in raw material prices, said analysts at Nomura.
7. Core inflation hits lowest point since the start of 2021
China’s core inflation, which excludes volatile food and energy prices, saw a year-on-year fall of 0.1 per cent in September, reaching its lowest point since the start of 2021.
The key gauge used by monetary authorities dropped 0.1 per cent from August, while growth in the first nine months of the year stood at 0.5 per cent.


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China’s exports grew in September, but the expansion was lower than expected, while deflation concerns persisted


China’s exports grew in September, but the expansion was lower than expected, while deflation concerns persisted.


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Explainer | 7 takeaways from China’s trade, inflation data in September

China’s exports grew in September, but the expansion was lower than expected, while deflation concerns persisted

1. Export growth softens