Experts predict China's Q3 exports jump 10%

Graphics: GT

China's exports likely grew an impressive 10 percent in the third quarter, trade analysts and financial institutions estimate, as foreign demand chalked up and domestic manufacturing activity returned to normal.

Uncertainty persists, experts said, as some swaths of the world seem to be experiencing a rapid resurgence in new coronavirus cases, which would be a drag on China's trade. But most experts still believe that China could achieve trade growth this year.

The nation's overseas foreign trade sustained a blow because of the coronavirus outbreak earlier in 2020, but it managed to recover at an accelerating pace in recent months. In August, yuan-denominated exports rose by 11.6 percent on a yearly basis to reach 1.65 trillion yuan ($247 billion), compared with a 10.4-percent gain in July.

The Standard Chartered estimated in a recent report that China's exports in September may have risen 10.3 percent year-on-year, while imports may have expanded 2.1 percent. The official trade numbers will be released on Tuesday.

Pang Chaoran, an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation, said that the export situation in August and July probably extended into September, which would mean third-quarter export expansion of about 10 percent, while overall trade likely rose about 5 percent.

China's first-quarter exports slumped a dramatic 11.4 percent on a yearly basis, but they returned to growth in the second quarter. In the first eight months, exports rose a slight 0.8 percent.

"Underpinning the rise of export, the recovery of China's manufacturing as a result of work and production resumption is the fundamental reason. On the demand side, the pandemic has been brought generally under control in China's major trade markets, which also resulted in climbing foreign orders," Pang told the Global Times.

In particular, many countries had a "production gap" after their factories closed as a result of the pandemic, which prompted a shift of orders from those countries to China. Rising demand for pandemic control products, many of which were made in China, also contributed to the export recovery, he said.

Wu Chaoming, chief economist at Chasing Securities, said that orders from some overseas countries had been delayed earlier this year because of the pandemic, which fueled China's exports in the third quarter.

The export growth also reflected the success of China's policy support to encourage foreign trade, including loans of favorable terms. Chasing Securities estimated that China's third-quarter exports grew by about 10 percent.

However, challenges still lie ahead, experts said, as demand will shrink during the winter holiday season in the West, and because the pandemic situation is still unstable there.

Recently, countries across Europe have seen a new resurgence in COVID-19 cases. France, for example, recorded more than 20,000 new cases on Friday, hitting a daily record. Paris and three neighboring regions were also put on the top coronavirus alert level.

"The second wave of the pandemic might slow China's export growth in the fourth quarter, but in general, I don't think it will exert the same kind of influence on China's trade as in the previous quarters," Wu said.

Experts and institutions anticipate export growth for the whole year. Chasing Securities estimated that exports could grow by about 5 percent year-on-year in 2020. Wu predicted that China's exports could achieve growth for the whole year, though he said that China's total trade volume might slip slightly, as imports would be dragged down by slumping bulk material prices and shrinking domestic demand.

In the first eight months of this year, China's imports slumped by 2.3 percent on a yearly basis to 9 trillion yuan.