Data released by the Customs General Administration of China (CGAC) showed that China's export growth slowed to a 5-month low in September, and was below economists' forecasts, indicating that global demand for Chinese goods is declining.
The volume of exports rose by 2.4% per annum after an increase of 8.7% per annum in August. Economists had expected an increase of 6% per annum. Meanwhile, the volume of imports increased by 0.3%, slowing down compared to August (+0.5%). Consensus estimates suggested an increase of 0.9%. As a result, the trade surplus fell to $81.71 billion (the lowest value since April) from $91.02 billion in August. Economists had expected a decrease to $89.8 billion.
Following a sharp increase in China's exports in August, economists warned that officials should avoid over-reliance on global demand as they work to maintain overall growth. On Saturday, Chinese officials announced plans to increase bond issuance to help local governments deal with their debt problems and provide additional support to low-income people. However, the politicians did not report on the amount of fiscal incentives, which disappointed the markets. Overall, analysts expect it will take a long time to restore consumer and business confidence and put the economy on a more solid footing.