China’s exports rose unexpectedly in September, official data showed Wednesday, but analysts warned of a looming hit from the country’s power crunch that has disrupted supply.
The data came after a sharp jump in trade in the world’s second-largest economy in August, suggesting that overseas demand for consumer goods had surged as a domestic virus outbreak was brought to heel.
But last month many factories were forced to halt operations owing to power outages caused by emission reduction targets, the surging price of coal and supply shortages – raising concern about global supply chains.
Yet, exports rose a better-than-expected 28.1% on-year in September, according to customs authorities – up from 25.6% in August.
This was a monthly record of US$305.7 billion.
“Although power rationing doesn’t appear to have derailed the export sector so far … it could do so in the coming weeks,” cautioned Capital Economics’ senior China economist Julian Evans-Pritchard.
However, imports missed predictions and rose 17.6%, just over half as much as the previous month’s increase.
With a number of Asian countries badly hit by the Delta variant of Covid-19, OCBC Bank’s Tommy Xie noted that orders were shifting back to China.
Floods in northern provinces disrupted mining this week, adding to the coal shortage, while power rationing could hit output and filter down supply chains, Evans-Pritchard said.
And possible “frontloading of US importers” to counter mounting shipping delays could be another factor for the unexpectedly strong exports, said Nomura chief China economist Lu Ting.
“The external environment has become more complex and severe, and our country’s foreign trade development still faces many unstable and uncertain factors,” customs spokesman Li Kuiwen told reporters on Wednesday.
But he stressed the resilience of China’s foreign trade, adding that in the first three quarters electronics exports rose 23% in yuan terms – making up more than half the value of all overseas shipments.
Although import volumes of key commodities such as coal and crude oil decreased slightly in the same period, average prices surged, Li said.
“Affected by the rise in global commodity prices, our import prices rose 11.3% on-year. Among that, the average import prices of iron ore, crude oil, copper and other commodities increased by more than 30%,” he said.
Louis Kuijs, head of Asia economics at Oxford Economics, warned that given the large increase in import prices, import volumes were down on a year ago as “demand in China’s economy slowed considerably.”