China exports expected to rebound, inflation to rise to 18-month high in October
(Reuters) – China’s exports are forecast to have rebounded in October after a surprise fall, reinforcing the government’s view that the economy has regained some momentum as its prepares to unveil plans to overhaul the world’s second-largest economy.
Forecasts in a Reuters poll for October data due out from later this week also have inflation rising to an 18-month high, retail sales and M2 money supply growth rates edging up slightly, while investment and industrial output tick down.
China’s leaders have touted stability rather than fast growth as they head into the Communist Party’s third plenary session, to be held November 9-12, where they are expected to outline plans to transform the economy into one driven by consumers rather than credit and investment.
“Given that policymakers have already said that they are no longer worried about meeting the growth target, we expect the focus to be on restructuring reforms,” said Jiaguang Shen, an economist with Minzhuo Securities in a note.
State media has quoted President Xi Jinping saying the reform plan would be comprehensive, and a series of articles from the official Xinhua news agency have flagged sweeping changes.
Analysts expect the economy to slow in the December quarter after growing at its quickest pace this year between July and September, in part due to the reform push but also because of global uncertainties.
Those uncertainties were seen in a surprise 0.3 annual decline in exports in September, partly due to weak demand from China’s Southeast Asian trading partners.
Exports are forecast to bounce back with a 3.2 percent rise in October from a year earlier, with the trade surplus increasing to $23.9 billion from last month’s $15.2 billion.
Premier Li Keqiang noted that weak exports were a risk in comments two weeks ago that were only made public on Tuesday, though he reiterated that the government’s 7.5 percent growth target for 2013 was intact.