iPhone 6 boost for China's economy
CHINA'S slowing economy received a shot in the arm from faster export growth last month, with external demand spilling over to boost imports for processing and re-shipment of goods such as the iPhone 6.
Exports increased 15.3 per cent from a year earlier, the biggest increase since February last year and beating the 12 per cent median estimate in a Bloomberg survey of analysts.
Imports rose 7 per cent against projections for a 2 per cent decline, leaving a trade surplus of about US$31 billion (S$39 billion), data from the Beijing-based Customs administration showed yesterday.
External demand is helping China weather a property slump even as the global outlook is becoming more clouded, with Federal Reserve officials highlighting mounting concern over the improving United States economy's ability to withstand foreign weakness. Imports for processing and re-export surged.
"Import growth last month was driven heavily by external demand and the processing trade industry, instead of domestic demand", with iPhone production one component of that, said Le Xia, chief Asia economist at Banco Bilbao Vizcaya Argentaria in Hong Kong.
"China's economy at the current stage is still kind of externally demand driven."
Chinese stocks maintained declines after the data. The Shanghai Composite Index was 0.7 per cent lower, while Hong Kong's Hang Seng Index was down 0.4 per cent at 1.25pm local time.
The iPhone 6 has "positive impacts on processing trade", Zheng Yuesheng, a spokesman for the Customs agency, said after a press briefing in Beijing yesterday.
The Customs department of Zhengzhou, where the iPhone factory is located, reported 6.22 million exports of new iPhone models as of Sept 21, according to a report by China News Service, a state news agency.
The increase in exports follows a previously reported 9.4 per cent jump in August, and compares with analysts' estimates for gains ranging from 7.7 per cent to 16.6 per cent. The surge was boosted by weakness in the year-earlier period, when shipments fell 0.3 per cent, according to previously reported data.
"(The) data is less good news than it appears," Louis Kuijs, Royal Bank of Scotland Group's chief Greater China economist in Hong Kong, said in a note.
"It suggests that China's export growth is holding up. However, the important caveat coming from the breakdown of the import data suggests that demand growth in China's own economy remains weak."