China Reports Strong Export/Import Results, But Stocks Don’t Care

September was another strong month for China’s exports and imports.
Steven LernerOct 13,2020,21:50

September was another strong month for China’s exports and imports, according to data released by the General Administration of Customs on Tuesday.

Imports from China increased 13.2% year-over-year in September, representing their fastest pace in 2020 and exceeding analysts’ projections of 0.3% growth. In August, imports declined 2.1%.

Exports grew by 9.9% in September. While this is what most analysts expected, it is also the sixth straight month of export growth.

Julian Evans-Pritchard, senior China economist at Capital Economics, told Al Jazeera: “The new export orders component of the manufacturing [purchasing manager’s index surveys] rose to a near 10-year high in September, pointing towards a further pick-up in shipments in the coming months.”

Despite the positive trade news, markets in Asia-Pacific were mixed on Tuesday. Japan’s Nikkei and the Shanghai Composite ticked up during trading hours, while South Korea’s Kospi slipped.

Why Are Chinese Exports and Imports Increasing?

The biggest catalysts to this recent growth in trade are the lifting of pandemic restrictions by more overseas partners and the recovery in global demand. Seeing the opportunity, Chinese businesses are moving in to fill the gaps that were created from the pandemic’s impact worldwide.

Another contributing factor to the growth in trade for China is the appreciation of the yuan over the past few months, which increases spending power.

There are some headwinds on the horizon that could hinder future growth for China’s exports. The top challenge comes from the increased economic tensions between the United States and China. China’s trade surplus with the U.S. dropped from $34.24 billion to $30.75 billion last month.

A November election victory for President Donald Trump could further escalate the situation.

Additionally, if there is a second lockdown and trading partners impose new restrictions, China’s exports will likely decline.

Topics:exports, imports,