China’s September Exports Unexpectedly Faster Despite Power Shortages

Source: National Bureau of Statistics of China

China’s export expansion unexpectedly rose in September as continued solid global demand offset pressures on factories from power shortages, supply constraints, and resurgence of local COVID-19 cases. CSI 300 Index up +1.15%, CNY USD up +0.09%

• The world’s second-largest economy has made a significant rebound from the pandemic, but there are indicators that recovery is losing pace.
• Resilient exports could offer a buffer against growing challenges, including weakening factory activity, persistent soft consumption level, and a slowing property sector.
• China’s shipments in September rose 28.1% from a year earlier, up from a 25.6% increase in August. Analysts surveyed by Reuters expected growth would cool down to 21%
• Erin Xin, Greater China economist at HSBC stated that exports have continued to outperform and accelerate, despite omitting the impact of base effects.
• Xin further stated that earlier shipments of holiday consumer products are contributing to the continued strength in exports.
• Power shortages attributed to a transition to clean energy, strong industrial demand, and high commodity prices, have stopped production at numerous factories, including supplying firms such as Apple and Tesla.