China’s exports likely to have improved in October

Exports of China in October are expected to have reversed the slump seen in September, when exports had declined sharply due to softness seen in raw materials. Capital goods shipment had also slowed in the prior month; however, at a much slower rate than raw materials.

But in the midst of strong headwinds, real exports are still showing signs of an uptrend. China’s exports are expected to have improved to -4 percent year-on-year in USD terms in October, according to a Societe Generale research note. The improvement is partially because of a favorable base effect.

In the meantime, imports are likely to have increased in October. The official and private PMI reports for the month of October both signalled towards stronger domestic demand. Stronger prices of commodity are also expected to have underpinned the growth in China’s imports, added Societe Generale.