This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.nytimes.com/2013/09/09/business/global/china-exports-up-more-than-expected.html

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Chinese Trade Surplus at Highest Level Since December Economic Reports Ease Concerns in China
(about 11 hours later)
BEIJING — China’s trade surplus rose in August to its highest level this year, in the latest sign of how China has emerged largely unscathed from the currency declines and stock market setbacks seen in many emerging markets this summer. HONG KONG — China’s trade surplus rose in August to its highest level this year, while inflation remained under control, government data released on Sunday and Monday showed, in further signs that the Chinese economy and possibly the global economy are faring a little better as the summer ends.
The General Administration of Customs in Beijing said on Sunday that China’s surplus reached $28.52 billion last month, the highest level since December. As foreign-exchange money poured in from around the world to buy Chinese goods, China’s central bank allowed the renminbi to inch up 0.1 percent against the dollar last month. The General Administration of Customs in Beijing said on Sunday that China’s surplus reached $28.52 billion last month, the highest level since last December, as exports accelerated. Because China is the world’s largest exporter and often the first large country to release trade data each month, its trade figures are a widely watched barometer not only for the health of China’s large export sector but also of the global economy.
“The market turbulence in emerging economies, especially in India and Indonesia, has made Rmb a center of stability,” Liu Li-Gang, the chief economist for greater China at the Australia and New Zealand Banking Group, said in a research note, using a common short form of the Chinese currency’s name. Two other worries about China — inflation at the consumer level that might fan public discontent or deflation at the producer level that might prompt companies to stop investing — seemed to be allayed at least temporarily as well by Monday morning’s data.
While the renminbi’s gain last month may have been tiny, it contrasted with declines among most emerging market currencies as investors fretted that U.S. Federal Reserve policy makers will decide at a meeting on Sept. 18 to begin reducing the pace of the American central bank’s asset purchases. That could cause interest rates in the United States to climb further, making investments there more attractive and reducing the appeal of emerging markets. The National Bureau of Statistics announced that consumer prices were only up 2.6 percent in August from a year earlier, compared to a 2.7 percent increase in July. At the same time, deflation slowed in producer prices, which fell only 1.6 percent in August after tumbling 2.3 percent in July.
The losers among emerging market currencies last month tended to be those of countries struggling to attract enough foreign investment to pay for their trade deficits. The biggest loser last month was the Indian rupee, which fell 8.2 percent. The Chinese trade and inflation data, and recent surveys showing more bullish sentiment among purchasing managers in China, are starting to give hope to those who argue that the gloom these days about Asian economies, particularly China’s, is excessive.
India has been running an especially large trade deficit lately, totaling $108.73 billion in the first seven months of this year, after legal and environmental disputes disrupted iron ore and coal production while growth in manufacturing exports remains lackluster. “China is no longer sliding, the global industrial cycle is ticking up, and, really, how high can rates go with the Fed printing money?” asked Frederic Neumann, the co-head of Asian economic research at HSBC.
China’s exports last month were particularly strong to Southeast Asia, South Korea and Taiwan. But China’s trade surplus also increased because imports were virtually unchanged for the huge category of reprocessing goods — everything from high-end plastics to computer chips that are imported by China for use in products that are then exported. To be sure, China still faces high and rising levels of domestic debt, eroding competitiveness because of surging wages and other challenges.
The flattening in imports of reprocessing goods reflects a broad move by many multinational companies to shift entire supply chains to mainland China, instead of merely assembling goods there from components that are manufactured all over the world. That trend toward procuring parts in China persists even as a growing number of export factories in low-wage sectors like garments, toys and furniture are moving to other countries, like Bangladesh, Cambodia and Vietnam. But China’s exports last month were up 7.1 percent last month compared to a year earlier, and particularly strong to Southeast Asia, South Korea and Taiwan. China’s trade surplus also increased because imports were virtually unchanged for the huge category of reprocessing goods — items as varied as high-end plastics and computer chips that are imported by China for use in products that are then exported.
Excluding reprocessing goods, China’s other imports grew strongly in August as officials in Beijing have authorized state-controlled banks to step up lending. Louis Kuijs, an economist in the Hong Kong office of the Royal Bank of Scotland, said the import data could indicate “continued robust growth in demand and economic activity in China’s own economy.” The flattening in imports of reprocessing goods reflects a broad move by many multinational companies to shift entire supply chains to mainland China, instead of merely assembling goods there from components manufactured all over the world. That trend toward procuring parts in China persists even as a growing number of export factories in low-wage sectors like garments, toys and furniture are moving to other countries, like Bangladesh, Cambodia and Vietnam.
But he cautioned that detailed data on domestic economic activity in China during August — including industrial production, investment in fixed assets, retail sales and other categories — is not scheduled for release until Tuesday. Excluding reprocessing goods, China’s other imports grew strongly in August as lending increased at state-controlled banks. Louis Kuijs, an economist in the Hong Kong office of the Royal Bank of Scotland, said the import data could indicate “continued robust growth in demand and economic activity in China’s own economy.”
But he cautioned that detailed information on domestic economic activity in China during August, including industrial production, investment in fixed assets and retail sales, was not scheduled for release until Tuesday morning in Beijing.
The trade and inflation data were the latest signs that China has emerged largely unscathed from currency declines and market setbacks seen in many emerging markets this summer.
As money poured in from around the world to buy Chinese goods, China’s central bank allowed the renminbi to inch up 0.1 percent against the dollar last month.
“The market turbulence in emerging economies, especially in India and Indonesia, has made Rmb a center of stability,” Liu Li-Gang, the chief economist for greater China at the Australia and New Zealand Banking Group, said in a research note, using a common abbreviation for the Chinese currency.
While the renminbi’s gain last month was tiny, it contrasted with declines among most emerging market currencies, as investors fretted that policy makers at the American central bank will decide at a meeting on Sept. 18 to begin slowing the pace of a program of asset purchases. That could cause interest rates in the United States to climb further, making investments there more attractive, and reducing the appeal of emerging markets.