China exports beat forecasts as booming global demand

China’s export growth slowed in October but beat forecasts as booming global demand for holiday seasons, an easing power crunch and mitigating supply chain disruptions offset some pressures facing the world’s second-largest economy.

Imports, however, missed analysts’ expectations, likely pointing to the overall weakness in domestic demand.

Outbound shipments jumped 27.1 per cent in October from a year earlier, slower than September’s 28.1 per cent gain. Analysts polled by Reuters had forecast growth would ease to 24.5 per cent.

Zhiwei Zhang, chief economist at Pinpoint Asset Management, said the strong exports would help to mitigate the weakening domestic economy, and offer the government with more room to manoeuvre economic policy.

“The government can afford to wait ‘til the year end to loosen monetary and fiscal policies, now that exports provide a buffer to smooth the economic slowdown,” he said.

Recent data has pointed to a manufacturing slowdown. Factory activity shrank for a second month in October, an official survey showed, while growth in industrial output eased to the lowest since March 2020 - the first wave of the pandemic.

However, under heavy government intervention, some supply constraints have started to ease in recent weeks. A power crunch - triggered by a shortage of coal, tougher emission standards and strong industrial demand - has started to ease after heavy government intervention.