BEIJING - China’s export growth sped up in October in fresh evidence of a broader rebound for the world’s second-largest economy, as a top official all but declared the country’s slowdown over.
Exports rose 11.6 per cent in October from a year earlier, the national customs bureau said Saturday, accelerating for a second straight month just as the Communist Party discusses how best to achieve sustainable economic growth. “The trend of slowdown has been effectively curbed,” Zhang Ping, head of the National Development and Reform Commission (NDRC), told reporters. “From October economic data the trend for a rebound in the Chinese economy is all the more obvious.”
China’s economic growth has slowed for seven straight quarters and hit a more than three-year low of 7.4 per cent in the three months through September, but recent data has fuelled optimism that the worst is over. Industrial production for October accelerated to growth of 9.6 per cent on-year, the government said Friday. Retail sales, the main measure of consumer spending, also picked up to a 14.5 per cent gain.
Fixed-asset investment, a key gauge of infrastructure spending, showed improvement, while inflation dipped to a nearly three-year low of 1.7 per cent.
The customs bureau also said Saturday that October imports increased 2.4 per cent, matching September’s gain. China’s trade surplus, a source of friction with the United States and other countries, widened to $32 billion, up from $27.7 billion in September.
The size was a surprise, surpassing the median forecast of $27 billion in a survey of economists by Dow Jones Newswires.
“Today’s trade data, together with improving domestic demand indicators released yesterday, continue to support our view that China’s growth momentum has picked up,” ANZ bank economists Liu Li-Gang and Zhou Hao wrote in a commentary.
Bank of America Merrill Lynch economists Lu Ting and Hu Weijun said the export data back up their view of economic growth strengthening to 7.8 per cent in the fourth quarter and 8.3 per cent in the first half of 2013.
“We believe China’s economic growth has truly bottomed out,” they said in a report. China’s Communist Party has been meeting since Thursday to anoint new leaders for the next 10 years at its 18th congress.
President Hu Jintao is expected to be replaced as party leader by Vice President Xi Jinping before the meeting adjourns Wednesday.
Hu, in a speech Thursday to the meeting, called for creating a new growth model with a robust private sector, while also insisting on the primacy of the party-led state sector.
He also warned that corruption threatens the existence of both party and state in the speech to the event, held every five years to boost the ruling party’s leadership credentials.
Modernising China’s economy and pulling hundreds of millions out of poverty in the more than three decades since the country embarked on reform policies is a key claim to legitimacy for the world’s largest political party.
China’s economy racked up average annual growth rates of more than 10 per cent in the decade through 2010, but officials now say they want an expansion that can be maintained.
“We are calling for a shift in the growth model... to focus on sustainable growth,” the NDRC’s Zhang said.
Independent economist Andy Xie, based in Shanghai, said the economy still faces headwinds given continued weakness in overseas economies and in China’s own domestic demand as shown by tepid import growth.
He also expressed a lack of confidence in the ability of party leaders to manage the economy. “At least in the last five years, it’s become very clear it’s about how to divide the spoils among the powerful people,” he said of the congress.
“I don’t see it’s changing. Without political reforms the economy is not coming back.”