CHINA'S exports grew at the slowest pace in eight months in October amid a worsening global economic climate, a stronger yuan and rising protectionism, adding pressure for the world's second-largest economy to adjust policies favoring growth.
Exports in October rose 15.9 percent from a year earlier to US$157.4 billion, the weakest since February, the General Administration of Customs said yesterday.
But imports maintained strong growth by increasing 28.7 percent to US$140.4 billion, faster than the pace of 20.9 percent in September.
The moderating exports growth and better-than-expected imports helped to reduce October's trade surplus to US$17 billion, down 36.5 percent from a year earlier.
"Export growth decelerated broadly in line with our expectation," said Huang Yiping, an economist at Barclays Capital. "The government should closely monitor export growth in the coming months as a factor in its monetary and exchange rate policy deliberations."
After China's inflation eased for a third straight month in October, China is likely to fine-tune its existing tight monetary policies to support economic growth, Huang said.
Apart from the potential easing of credit for small companies, some suggested exported-oriented firms should transform themselves and look toward the domestic market.
"Chinese exporters are facing huge challenges including shrinking global demand, a stronger yuan, more expensive labor costs and rising trade protectionism," said Zhao Yanyun, a professor at Renmin University of China.
"Exporters should sharpen their competitiveness under such circumstances, or they can look into the domestic market for new opportunities," Zhao suggested.
According to earlier reports, a batch of toy exporters, including China Focus (Yiwu) Ltd, have been seeking licenses for selling their products in the Chinese market.
Less demand from the European Union and the United States was largely responsible for the shrinkage in China's exports growth. Bilateral trade with the EU increased 20.2 percent from a year earlier to US$466.9 billion in the first 10 months, slower than China's overall trade growth of 24.3 percent. Trade with the US rose an even weaker 16.8 percent, data from the customs showed.
In comparison, emerging markets demonstrated resiliency in doing business with China. Bilateral trade with South Africa surged 80.7 percent from a year ago while shipments with Russia climbed 43.8 percent.
Lian Ping, chief economist at Bank of Communications, predicted exports and imports growth will slow down in the coming months.
"The sudden pick-up in imports is possible because the need for inventory building, like crude oil and copper, with importers taking advantage of the sharp correction in global commodity prices," Lian said. "It can't sustain for very long."