China's October Trade Data

BEIJING (Reuters) – China's outbound shipments likely rose at a faster pace in October, buoyed by better weather and steep discounts, despite a reported drop in global demand from manufacturers and major exporters.

Trade data for October is expected to show exports grew 5.2% year-on-year by value, according to a median forecast of 34 economists in a Reuters poll, up from a 2.4% increase in September.

Imports are likely to have shrunk 1.5% last month, reversing a 0.3% gain in September. The data will be released on Thursday.

Analysts believe that factory owners are still slashing prices to attract buyers, and improved weather last month enabled producers to send out delayed orders, with trade data from South Korea and Taiwan remaining consistent with cooling global demand.

German manufacturers are also reporting difficulties in finding buyers overseas. Additionally, Chinese factory owners are rushing to fulfill orders ahead of the U.S. presidential election, which is expected to tighten American restrictions on Chinese goods regardless of the outcome.

Analysts are optimistic that exports rebounded from the disruptions seen in September due to extreme weather events. Xu Tianchen, a senior economist at the Economist Intelligence Unit, forecasts an increase of 6.5%, one of the highest predictions.

Natural disasters, such as super typhoons and floods, caused 230 billion yuan ($32.23 billion) in direct economic losses over the third quarter, according to the Ministry of Emergency Management.

In contrast, Barclays expects that China's export growth slowed further last month, predicting just a 2% increase, the lowest forecast. An official factory activity survey for October indicated that producers still felt fewer orders from overseas.

However, manufacturing activity expanded for the first time in six months, with factory owners reporting an uptick in overall orders, signaling improving domestic demand. South Korea's exports to China, a key indicator of the $19 trillion economy's imports, rose 10.9% to a 25-month high.

Export momentum has been one bright spot in the Chinese economy, which has struggled with weak domestic demand and a property market debt crisis. Economists advise against over-reliance on outbound shipments for growth and recommend introducing more stimulus.

Analysts are now focusing on a $1.4 trillion fiscal package expected to be approved this week, aimed at stabilizing local government and property developers' balance sheets, potentially easing strains on consumption.

China's trade surplus for October is forecast at $76.03 billion, down from $81.71 billion in September.

> Note: ($1 = 7.1360 Chinese yuan renminbi)