China’s trade surplus narrows in September
China’s trade surplus narrowed for the second consecutive month in September, raising concerns about a deteriorating global economy and slowdown in the world’s factory floor.
Trade data released Thursday showed Chinese exports rose 17.1% last month from a year earlier, down from 24.5% growth in August. Growth in imports slowed as well.
Troubles in the Eurozone are weighing heavily on demand for Chinese goods. China’s exports to the continent grew 9.8% in September from a year earlier, compared with 22.3% in August. Exports to the U.S. grew 11.6% year over year in September, down slightly from a 12.5% gain in August.
“China’s export growth is feeling the chill from the intensifying crisis and weakening demand from the West,” economists at HSBC said in a research note.
China’s trade surplus shrank to $14.5 billion in September, compared with $17.8 billion in August and $31.5 billion in July.
That could ease some of the international pressure on Beijing to quickly raise the value of its currency, known as the yuan and renminbi.
A U.S. bill that passed the Senate and is now before the House would slap import tariffs on countries that are found to have weakened their currency to create an unfair trade advantage.
The yuan was set at an all-time high against the dollar Tuesday before the Senate vote on the tariff bill, at 6.348. It crawled down slightly Thursday to 6.373.
Brian Jackson, a senior strategist for the Royal Bank of Canada, said the focus on the yuan exchange rate against the dollar ignores China’s loss of trade competitiveness with other countries besides the U.S.
“Although the yuan has stalled against the dollar since mid-August, it has appreciated considerably against the euro and other Asian currencies over this period, so in trade-weighted terms China’s currency has strengthened significantly over the last two months,” Jackson wrote in a note to clients.
He added: “So although Washington is ramping up the pressure on Beijing to move faster on the currency, Chinese officials will be able to cite today’s data as evidence that exporters are already feeling the pinch.”
Chinese manufacturers already are battling inflation and tighter credit. Hundreds of companies in coastal provinces have reportedly closed.
Speaking to reporters after releasing the trade data, Vice Customs Minister Lu Peijun said several uncertainties threatened the stability of exports for the rest of the year, chiefly demand from the West and yuan fluctuations.
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