Strong trade figures export new optimism (2)

08:33, October 15, 2009      

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China's purchasing management index (PMI), another indicator of the economic health of the manufacturing sector, rose to 54.3 percent in September, 0.3 percentage points higher than it was in August, according to the China Federation of Logistics and Purchasing. It was the seventh consecutive month that the index had risen above 50 percent.

"Monthly exports during the last quarter are expected to stand at more than $100 billion, and the drop for the whole year could be less than 20 percent," said Zhang.

He predicted that "in November, exports will grow", considering the low reference point. Exports have been falling each month since last November.

Imports in September were worth $103.01 billion. That represented a 17 percent increase on the volume of imports in August, according to the Customs data.

Exports totaled $115.9 billion, up 11.8 percent from August.

Total foreign trade reached $218.94 billion in September, down by 10.1 percent year-on- year.

"The improvements (among both exports and imports) were much larger than expected. The worst is over," said Denise Yam from Morgan Stanley.

The fall in imports was the smallest since last November.

Among the imported material was large volumes of iron ore, copper and aluminum. Imports of iron ore rose to a record 64.6 million metric tons.

"This reflects strong domestic consumption, led by China's economic stimulus package, and is also a positive sign for exports," said Zhang.

But Li Wei, an economist with Standard Chartered, believed the improvements will not be sustained in the next half year because there has not been sufficient growth in domestic investment and consumption.

"The improvement will be slow," he said.

Source: China Daily
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