October trade figures beat estimates

Two buyers examine products for Christmas in Yiwu, Zhejiang province. Thanks to stronger demands from the United States and European Union. China's exports in October increased 5.6 percent year-on-year, the General Administration of Customs?said on Friday. [Photo / China Daiy]

China's exports and imports regained momentum in October as global conditions improved and domestic demand remained steady.

The improvement in October increased the country's odds of achieving the 8 percent trade growth target for 2013, which was set at the start of this year, experts said.

"China's foreign trade performance was satisfactory last month, with exports and imports regaining steam more quickly than anticipated," said Wang Jun, an expert at the China Center for International Economic Exchanges.

Total trade last month was up 6.5 percent year-on-year. Exports increased 5.6 percent, compared with close to 0.3 percent decline in September, the General Administration of Customs said on Friday.

Imports rose 7.6 percent, faster than the 7.4 percent growth pace in the previous month, yielding a trade surplus of $31.1 billion, the biggest so far this year.

"China's external trade environment is smooth, with demand from the United States and the European Union rebounding. Meanwhile, imports have remained robust since mid-year owing to an improvement in domestic demand," Wang said. Exports to the US, the country's largest market, expanded 8.1 percent, the biggest increase since February.

On Thursday, statistics were released showing that the US economy grew an estimated 2.8 percent in the third quarter, the fastest pace this year and up from 2.5 percent in the second quarter.

Export shipments to the EU, China's second-biggest market, surged 12.7 percent in October, the biggest rise since February.

The EU has seen a return to economic growth this year, while its debt crisis has eased and confidence has returned to its financial markets, according to Jonathan Faull, director-general for the internal market and services of the European Commission.

Stronger overseas demand may strengthen confidence among China's new leadership as to meeting this year's 7.5 percent GDP growth target. The Party's 18th Central Committee will hold a meeting, the Third Plenary Session, from Saturday to Tuesday.

That meeting is expected to formulate a blueprint for the nation's economic reforms over the next decade.

As China's exports gradually improve and the trade surplus continues to widen, the country is likely to see increased capital inflows and easier domestic liquidity, the financial department of the Bank of China Ltd said in a research note.

The trade surplus during the January-October period stood at $200.46 billion, the biggest 10-month total since 2008 and approaching the full-year figure of $230.7 billion for 2012.

Meanwhile, China's currency has appreciated about 2.3 percent against the US dollar this year, the most among 11 major Asian currencies tracked by Bloomberg. A stronger yuan hurts China's exports as it makes Chinese products more expensive abroad in dollar terms.

"China has a strong possibility of reaching the 8 percent trade growth target this year, as the demand from developed economies has significantly improved from last year," said Song Hong, an economist at the Institute of World Economics and Politics at the Chinese Academy of Social Sciences.

The academy is a central government think tank.

Overall trade in the January-October period rose 7.6 percent to $3.4 trillion, said the customs agency. Trade with the EU went up 0.5 percent, while that with the US was up 6.9 percent.

Trade with the Association of Southeast Asian Nations rose 10.9 percent, but that with Japan dropped 7 percent.

Bloomberg News contributed to this story.