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China's trade weaker than expected in October

CHINA's exports in October decreased by 7.3 per cent compared to the same month a year earlier, while imports fell by 1.4 per cent, according to government data, sparking fears that a broader recovery seen in recent months could lose momentum.

While recent data had suggested the world's second-largest economy was steadying, analysts have warned that a property boom which has generated a significant share of the growth may be peaking, weakening demand for building materials from cement to steel, reported Reuters.

Indeed, China's imports of iron ore, crude oil, coal and copper all declined in October, after its robust demand pushed up global prices of many major commodities this year.

"Our conclusion is that external demand remains sluggish but it has not worsened significantly. Although both exports and imports have fallen short of expectations, they have improved on a year-on-year basis," economists at ANZ said in a note, noting the rate of decline in October had moderated from September.

In the first 10 months of the year, China's exports decreased by 7.7 per cent from the same period a year earlier, while imports fell by 7.5 per cent.

Exports to the United States dropped by 5.6 per cent in October, compared to an 8.1 per cent decline in September, while shipments to the EU fell 8.7 per cent, a slight improvement from the previous month.

China's imports from Southeast Asia increased by 18.4 per cent in October, while those from Australia rose by 16.3 per cent, both significant improvements from recent months.

That left the country with a trade surplus of US$49.06 billion in October, higher than September's $41.99 billion.

In yuan-denominated terms, the trade numbers weren't as bad, indicating that the currency's slide to six-year lows has provided some support for exporters. Yuan-denominated shipments have only fallen two per cent this year, with imports down 1.8 per cent.

"The ongoing cyclical rebound in China's economy should support imports for another quarter or two but is unlikely to last much longer given that the boost to growth from earlier policy easing is set to fade before long," Capital Economics' China economist Julian Evans-Pritchard said in a note.

The Commerce Ministry said last week that China will face relatively large downwards pressure on foreign trade in the fourth quarter, with uncertainties continuing into 2017.

China's economy expanded by 6.7 per cent in the third quarter and looks set to hit Beijing's full-year target, fuelled by stronger government spending and a red-hot property market that are adding to its growing pile of debt.