Oct 15, 2009
Source: Reuters
By Zhou Xin and Simon Rabinovitch

China reported surprisingly strong trade figures on Wednesday, providing fresh evidence that the world's third-largest economy is firmly on the path to recovery and that global demand is improving too.

A worker melts a structure of a billboard at a construction site in Hefei, Anhui province October 14, 2009. China's economic growth will easily reach its 8 percent target this year and will increase to 9 percent in 2010 as it leads major countries in the rebound from the global downturn, a Reuters poll shows. REUTERS/Stringer

Exports in September fell 15.2 percent from a year earlier, beating forecasts of a 21 percent fall, while imports fell just 3.5 percent -- well short of expectations of a 15.3 percent decline, the General Administration of Customs said.

Brian Jackson, an economist at Royal Bank of Canada in Hong Kong, said the slower pace of decline was good news for China's recovery because growth this year has depended too much on the government's 4 trillion yuan ($585 billion) stimulus package.

Indeed, after adjustments to take account of the number of working days in each month, exports rose 6.3 percent in September from August and imports rose 8.3 percent, Customs said.

"Stronger external demand will provide an alternative source of support for growth and provide scope for Beijing to start tightening policy gradually from early 2010," Jackson said.

With imports showing strength, China's trade surplus fell to $12.9 billion last month from $15.7 billion in August. Markets had expected a figure of $17.0 billion.

Economists expect the year-on-year readings in exports to keep improving. Trade slumped after a shock to confidence from the collapse of investment bank Lehman Brothers in September 2008, creating an increasingly favorable statistical base of comparison as 2009 wears on.