China's Exports Miss forecasts as Lone Bright Spot Fades

Employees work on solar photovoltaic modules that will be exported at a factory in Lianyungang, in China's eastern Jiangsu province on January 4, 2024. (Photo by AFP)
Employees work on solar photovoltaic modules that will be exported at a factory in Lianyungang, in China's eastern Jiangsu province on January 4, 2024. (Photo by AFP)
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China's Exports Miss forecasts as Lone Bright Spot Fades

Employees work on solar photovoltaic modules that will be exported at a factory in Lianyungang, in China's eastern Jiangsu province on January 4, 2024. (Photo by AFP)
Employees work on solar photovoltaic modules that will be exported at a factory in Lianyungang, in China's eastern Jiangsu province on January 4, 2024. (Photo by AFP)

China's export growth slowed sharply in September while imports also unexpectedly decelerated, undershooting forecasts by big margins and suggesting manufacturers are slashing prices to move inventory ahead of tariffs from several trade partners.

Last month, export momentum had been one bright spot for the Chinese economy that has struggled to gain traction due to weak domestic demand and a property market debt crisis, adding to the urgency for stronger stimulus.

Outbound shipments from the world's second-largest economy grew 2.4% year-on-year last month, the slowest pace since April, customs data showed on Monday, missing a forecast 6.0% increase in a Reuters poll of economists and a 8.7% rise in August.

Imports edged up 0.3%, missing expectations for a 0.9% rise and softer than 0.5% growth previously.

The weak data does not bode well for exports in coming months as just under a third of China's purchases are parts for re-export, particularly in the electronics sector.

The European Commission on Oct. 4 saw its motion to impose additional duties on electric vehicles built in China of up to 45% pass in a divided vote of EU member states, joining the US and Canada in tightening trade measures against China.

China's overall trade surplus narrowed to $81.71 billion in September from $91.02 billion in August and missed a forecast of $89.80 billion.

China's trade surplus with the United States narrowed to $33.33 billion in September from $33.81 billion in August, customs data showed on Monday.

Manufacturing activity shrank sharply in September, according to a recent factory owners' confidence survey, with new export orders falling to their worst in seven months.

Analysts have attributed previous months' strong export performance to factory owners slashing prices to find buyers.

Analysts anticipate it will take a long time to restore consumer and business confidence and get the $19 trillion economy on a more solid footing. A housing market recovery, in particular, could be a long way off.

That said, China's iron ore imports rose 2.9% last month year-on-year, partly on hopes for improved demand over September and October, the peak construction season, while the country's copper imports climbed from a month prior too.

New bank lending in China missed forecasts in September, separate data released by the People's Bank of China showed, although household loans, including mortgages, rose to 500 billion yuan in September from 190 billion yuan in August, according to Reuters' calculations.



Iraq Signs Contract to Construct Offshore Crude Export Pipeline With 2.4 Million Bpd Capacity

Iraqi Oil Minister Hayyan Abdul Ghani witnesses the signing of a deal to establish a subsea oil pipeline for exports via its southern ports (INA) 
Iraqi Oil Minister Hayyan Abdul Ghani witnesses the signing of a deal to establish a subsea oil pipeline for exports via its southern ports (INA) 
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Iraq Signs Contract to Construct Offshore Crude Export Pipeline With 2.4 Million Bpd Capacity

Iraqi Oil Minister Hayyan Abdul Ghani witnesses the signing of a deal to establish a subsea oil pipeline for exports via its southern ports (INA) 
Iraqi Oil Minister Hayyan Abdul Ghani witnesses the signing of a deal to establish a subsea oil pipeline for exports via its southern ports (INA) 

The Iraqi Oil Ministry said on Sunday that Baghdad has signed a deal to establish a subsea oil pipeline for exports via its southern ports.

The project is in cooperation with Italian offshore contractor Micoperi and Türkiye’s Esta for a pipeline with capacity of 2.4 million barrels per day (bpd), the ministry said without providing further detail on the destination of the exports.

“The state-owned Basra Oil Company signed a contract on Sunday to implement the third offshore export pipeline project with a consortium of the Italian company MICOPERI and the Turkish company ESTA, with a design capacity estimated at 2.4 million barrels per day,” said the Iraqi news agency quoting a statement by the Ministry.

The statement said it is “an important strategic project and is part of the government's program. It aims to ensure flexibility and stability for crude oil export operations from the southern ports”.

The Ministry also explained that the project’s flexibility lies in the ability to export crude oil from three ports: Basra Port, Khor al-Amaya Port, and the floating platform.