China’s exports gain, imports surge in September amid reopenings

China’s exports rose for the fourth straight month in September while imports surged, pointing to further recovery in the month for global trade and a robust domestic rebound.

Exports grew 9.9% in dollar terms in September from a year earlier, while imports rose 13.2%, the customs administration said Tuesday. That left a trade surplus of $37 billion for the month. Economists had forecast that exports would increase by 10% while imports would edge up 0.4%.

The data indicate that China’s relatively rapid return to full production after its own pandemic shutdowns have enabled it to take full advantage of manufacturing re-openings and consumer demand elsewhere. At the same time, the resurgence of the virus in Europe and elsewhere poses a threat to the recovery, as do geopolitical tensions with the U.S.

The surge in imports “suggest that domestic demand remains on a decent footing,” said Zhou Hao, an economist at Commerzbank AG. “On the other hand, it could also indicate that the global economy is gradually coming back after a long halt.”

Tech Distortions

The strong import performance may in part have been driven by tech industry stockpiling, ahead of the imposition of sanctions on telecommunications firm Huawei Technologies Co.

Signaling strong activity in the Asian tech supply chain, purchases from Taiwan jumped 35.8%, while imports from Japan and South Korea rose 13.4% and 17.2% respectively.

Imports of integrated circuits reached a record high in absolute terms, a fact that’s “likely the result of both the domestic recovery and geopolitical tensions,” according to Tommy Xie, an economist at Oversea Chinese Banking Corp. in Singapore. “On the bright side, that’s due to strong demand for electronic products due to working from home arrangements. On dark side, I think companies are stocking up, fearing more restrictions from the U.S.”

What Bloomberg’s Economists Say

“Looking ahead, we expect exports to continue to pick up on a year-on-year basis in the months ahead. But we think headwinds may strengthen, due to renewed outbreaks of Covid-19 in Europe and potential risks to trade related to the deterioration in U.S.-China relations.”

—David Qu, China economist

Exports to the U.S. rose 20.5% to $44 billion and imports increased almost 25% to $13.2 billion, the data showed, resulting in a trade surplus of $30.8 billion, according to Bloomberg calculations.

“We expect the uptrend in exports to continue,” said Louis Kuijs, an economist at Oxford Economics Ltd. “Renewed virus outbreaks in trading partners will be a challenge, but shipments of products benefiting from virus-related demand should continue to hold up.”