Tech, iron ore help drive surprise Chinese import jump

China’s imports surged in September, defying expectations, official data showed on Tuesday, October 13, while exports rose for a 4th straight month as shops further opened up after virus lockdowns.

Shipments into the world’s second largest economy spiked 13.2% last month, smashing forecasts of a 0.4% increase as companies and consumers dipped into their pockets following months of coronavirus uncertainty and geopolitical tensions.

Corporate buying of tech products before United States restrictions hit was likely a key driver behind the “extremely strong imports,” said Stephen Innes, chief global markets strategist at AxiCorp.

Customs data released on Tuesday showed the first import bounce since June, also supported by agricultural products.

Meanwhile, imports of iron ore and electronic integrated circuits hit record high values as infrastructure investments show strength and companies stock up, Tommy Xie, head of Greater China research at OCBC Bank, told Agence France-Presse.

“Imports of agricultural and industrial commodities picked up, with the latter pointing toward continued strength in infrastructure and property investment,” said Julian Evans-Pritchard, senior China economist of Capital Economics.

Exports rose 9.9% on-year, the Customs Administration said, initially spurred by worldwide demand for Made-in-China personal protective equipment such as face masks and gowns but now widening to household appliances and plastics.

Customs spokesman Li Kuiwen told reporters that foreign trade has been “better than expected”, although the spread of COVID-19 and the ensuing economic carnage makes the global landscape “increasingly grim and complicated.”

Fresh waves of infections in key markets – including the US and Europe – could batter external demand again.

China’s trade surplus with the US – the core gripe in Washington in their bruising trade war – rose 18.8% to $30.75 billion, that was down from the $34.2 billion seen in August.

Imports of agricultural commodities picked up, with meat shipments rising 82.6% on-year over the first 9 months, while grains and soybeans also saw increases, according to official data.

“In the near-term, infrastructure-led stimulus looks set to continue alongside a gradual recovery in oil prices, which is likely to keep imports strong,” Evans-Pritchard said. “Meanwhile, exports should continue to benefit from the recovery in global demand.”

Financial intelligence firm Moody’s Analytics cautioned this week that the recovery in overseas demand “has been uneven and aided by the notable increase in demand for medical, electrical, and high-tech products.” – Rappler.com