BEIJING (Reuters) - China’s export growth probably edged up from extreme low levels in August while a slump in import was seen deepening, according to a Reuters poll, reflecting concerns that the world’s second-largest economy may have cooled further in the third quarter.
Any sign of China’s slowdown being prolonged is likely to harden expectations that Beijing will take steps to boost an economy that has already slowed for six straight quarters and is at risk of missing this year’s target of 7.5 percent growth.
The median forecast of 22 analysts surveyed by Reuters showed China’s exports grew 3 percent in August from a year earlier, while annual growth in imports cooled to 3.5 percent from July’s 4.7 percent.
The monthly trade surplus is seen shrinking to $19.8 billion, from July’s $25.1 billion.
China surprised investors in July when its exports grew a meager 1 percent from a year ago, the weakest growth in nearly three years excluding a contraction in January when the Lunar New Year holiday distorted trade flows.
And analysts say the trade outlook remains cloudy, with exporters battling a global economic downturn, and imports subdued by soft demand and destocking of inventories in the machinery and materials sectors.
“We expect export growth to have picked up slightly to 2.5 percent year-on-year in August, but the government’s 10 percent export growth projection looks increasingly unrealistic,” said Tao Wang, an economist at UBS.
Indeed, leading indicators suggest trade may not pick up anytime soon.
The HSBC purchasing managers’ index, an early indicator of China’s economic performance for each month, showed new export orders fell at their fastest pace in August since March 2009.
China’s official factory PMI showed new export orders stabilized at 46.6 in August from July, but still below the 50-point level that separates expansion from contraction.
The depth of China’s trade downturn has been a surprise to Beijing. China’s Premier Wen Jiabao pledged last month to take more action to stabilize export growth in the third quarter.
China’s economy grew 7.6 percent in the second quarter, the slowest in three years. Trade was a drag on an economy, otherwise bolstered by domestic consumption and capital spending.
Reporting By Xiaoyi Shao and Koh Gui Qing; Editing by Simon Cameron-Moore