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China exports growth hits 8-month high, imports defy pollution curbs

Reuters  |  BEIJING 

(Reuters) - China's and unexpectedly accelerated last month in an encouraging sign for the world's second-biggest economy, though analysts expect growth to continue cooling amid a crackdown on financial risks and polluting factories.

As global demand has surprised with its strength, consumers have lapped up Chinese goods at a rapid rate this year, giving the a boost and providing policy makers room to tighten rules to curb high-risk lending.

in November rose 12.3 percent year-on-year, the fastest pace in eight months, led by strong sales of electronics and high-tech goods, while commodity purchases helped lift

The number beat analysts' forecast of a 5.0 percent increase and compared with 6.9 percent growth in October.

grew 17.7 percent year-on-year in November, the General Administration of Customs said on Friday, also well above expectations of 11.3 percent growth and rising at the fastest pace since September.

The numbers may help to ease concerns of slowing momentum in Asia's economic powerhouse, which had surprised markets with robust growth of nearly 6.9 percent in the first nine months of this year, thanks to a government-led infrastructure spending spree and unexpected strength in

"While we still expect China's domestic to cool in 2018 on gradually tighter financial policies, the November import data shows that there are upside risks to our outlook", said Louis Kuijs, head of Asia Economics at Oxford Economics in Hong Kong.

Tighter rules to rein in risks from a rapid build-up in debt and cut pollution have weighed on overall activity since the third quarter.

Besides ramped-up efforts to reduce winter pollution, authorities unveiled fresh regulatory measures last month for the financial sector, clamping down on high-risk lending and halting some dubious infrastructure projects that would swell local governments' debt.

BOUNCE TO TAIL OFF?

Some of China's northern provinces have ordered factories to throttle back or halt output to reduce notoriously thick winter smog.

While the war on pollution had been expected to reduce raw materials imports, Friday's numbers showed commodity rebounded last month.

China's natural gas in November rose to a record as domestic demand surged while crude were the second-highest ever, as refiners ramped up output to cash in on strong profits as fuel prices soar.

China's iron ore rose in November even as steel mills are cutting output as part of a drive against pollution as some analysts said traders were stockpiling inventory.

Iron ore "were not necessarily just by steel mills but could have been also purchased by traders," said Helen Lau at Argonaut Securities in Hong Kong.

"They're trying to accumulate stocks and will do so maybe through March in anticipation of Chinese mills resuming production when lifts the winter restrictions."

Steel rose from the previous month to 5.35 million tonnes in November, data showed.

The rebound in come as China's yuan has fallen 2.8 percent against the dollar since hitting its 2017 peak on Sept. 8.

The latest data showed the country posted a surplus of $40.21 billion for the month versus expectations for $35 billion in November after October's $38.185 billion.

China's surplus with the United States expanded in November to $27.87 billion from $26.62 billion in October. Chinese to the U.S. rose 14.3 percent and increased 4.2 percent.

to other major trading partners also jumped. Shipments to Australia and ASEAN each increased more than 18 percent from November 2016, while those to the EU rose 13.2 percent.

Despite the overall strength of the November data, could come under pressure as China's cools, analysts say.

"Chinese looks to have been surprisingly strong last month. We expect to continue to perform well in the coming months on the back of strong global demand," Capital Economics economist Julian Evans-Pritchard wrote in a note.

"However, we are sceptical that the strength of can be sustained given that the delayed impact of policy tightening and a cooling property market are set to weigh on Chinese demand for commodities in coming quarters."

(Reporting by Lusha Zhang and Elias Glenn; additional reporting by Winni Zhou in Shanghai; Editing by Shri Navaratnam and Richard Borsuk)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, December 08 2017. 17:19 IST
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