More surprisingly, we also saw China’s import demand accelerate to 7.4% YoY, up from 1.3% in August. This growth represented a 17-month high, and came as a surprise given the recent signs of softness in domestic demand. Through the first three quarters of the year, imports contracted -1.1% YoY ytd to $1.90tn.
Commodities imports may have contributed to the import growth surprise in September. In YoY terms, iron (13.4%) and copper (24.4%) both saw strong growth. Agricultural imports as a whole grew 5.7% YoY, a little slower than headline growth. Within this category, though, imports of meat (24.7%), fruits (10.9%), and edible oils (9.6%) all displayed strength.
Commodities aside, the import categories which have performed well in previous months continued to see strong growth in September as well. Hi-tech imports (14.1%), semiconductors (14.1%), and aircraft (201.3%) all outperformed the headline growth in September. The continued outperformance of these categories is unsurprising given the policy focus.
The impact of the US-China trade spat can be seen in China’s import profile as well. Imports from the US slumped to -16.1% YoY in September amid reports of halting soybean purchases. Instead, imports from the EU (9.4%), Japan (20.9%), South Korea (13.1%), Africa (22.4%), and Latin America (17.9%) all saw strong growth in September.
The September data was encouraging, but the overall trend remains uncertain. Moving forward, the fourth quarter should benefit from a relatively supportive base effect for imports. But unless domestic demand recovers by more than expected, growth looks likely to moderate from September’s levels.
A flip side of the stronger import data, the trade surplus actually came in below expectations at $90.5bn.