Combined with the better export data in Korea and Taiwan, China's export numbers suggests some—although not yet decisive—improvement in global demand momentum, according to the Royal Bank of Scotland.
China's goods exports rose 5.6% yoy in US$ terms in October, while imports grew 7.4% yoy.
In RBS' preliminary estimates, China's processing imports were down 1.4% yoy in real terms, in line with poor processing exports. On the other hand, RBS estimates normal imports were up 13.3% yoy in real terms in October, reflecting healthy expansion of domestic demand and thus economic activity in China’s economy.
Growth of exports to the US rose from 4.2% in September to 8.1% in October and shipments to the EU expanded 12.7%, after a decline of 1% in September (all yoy). Exports to the ASEAN region increased 10.7%, significantly less than earlier this year, reflecting the economic slowdown there as countries are trying to reduce current account deficits.
Meanwhile, Korean export growth rose from a contraction of 1.5% in September to an expansion of 7.3% in October, and Taiwan also saw an improvement in yoy growth last month, albeit to a still low -1.5%.
With the drag from the inflated base of a year ago getting larger, China’s headline export data may look quite weak in the months ahead. Nevertheless, RBS expects actual export growth to rise in the coming quarters, reflecting a gradual economic upturn in the US and Europe.
"The momentum in Asian exports seems to be improving. However, it seems too early to call this a decisive upswing," says RBS. "Stronger export growth is an important factor behind our overall growth projection and expectation for the macro policy stance."