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China’s economy still facing ‘ups and downs’ despite trade, inflation uptick in September

  • Declines in China’s exports and imports narrowed in September, but deflationary pressure and weak domestic demand remain headaches for Beijing
  • Weak confidence in the property market, as well as the uncertainty in the global economy and a potential slowdown in the US are seen as major headwinds

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China’s exports fell by 6.2 per cent, year on year, in September, data released on Friday showed, while imports also fell by 6.2 per cent last month. Photo: Xinhua
Frank Chenin ShanghaiandLuna Sunin Beijing

China’s economy witnessed increased signs of improvement in September, as supportive policies started to take effect, although persistent headwinds may still dampen a sustained recovery, analysts said.

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Trade improved modestly last month as declines in exports and imports narrowed, but headline inflation readings indicated lingering deflationary pressure and stubbornly weak domestic demand.

Later on Friday, the People’s Bank of China said that it had ample policy room to support the economy.

It won’t be a one-way process, it will have its ups and downs
Larry Hu
“China’s economy, despite its volatility, will sustain a mild recovery in the next six months. But it won’t be a one-way process, it will have its ups and downs, which is particularly reflected in the [inflation] data,” said Larry Hu, chief China economist at Macquarie Group.

“But there won’t be a bazooka stimulus in the near future, instead, it will remain a piecemeal strategy like what was seen in the past few months.”

Weak confidence in the property market, as well as the uncertainty in the global economy and a potential slowdown in the United States, are among the main challenges facing China, Hu added.

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In September, exports fell for a fifth consecutive month after dropping by 6.2 per cent from a year earlier to US$299.1 billion, the General Administration of Customs said on Friday.

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