Weak exports show limits of China's growth model

One unexpected decline in exports in September, after a series of monthly bescheidenden, signaled renewed weakness in emerging markets, the major trading partner for China are, and are indicating that the boundaries of the building next to the economy makes export growth.

Statistical trickery can explain part of the drop, but overseas demand is not much for the Chinese economy.

China revealed $185,6 billion value of 0.3% from the same month last year and far short of the forecasts of economists by 5.5% growth were from abroad in September,.

One reason for the September exports look so bad, that a year ago, exporters probably bring their sales as a way to fund that exaggerate were bypass onerous restrictions on foreign exchange.  Shady, have the company pull this trick for years, but it really took from the end of 2012 as a strengthening Chinese economy and expectations that the Yuan would rise, provided a strong incentive to get money in the country.

Only after reporting in the media widely used authorities, to tough rules on invoicing excessively may last year prompted the export figures of the earth return.

It is hard to know, but the official export statistics were probably significantly inflated by September last year, make the current numbers in comparison worse look. Ting Lu, an economist at BofA Merrill Lynch, notes, the exports of integrated circuits a favorite item for overinvoicing - and broadcasts through bonded areas, other red flag, Bank both were much higher in September 2012.

"We expect headline export growth still weak--or even in negative territory - in the next two quarters, unless revised Chinese Government over export data", said Mr LU.

It doesn't help that in September this year was one less working day, thanks to the timing of the mid-autumn holiday, undermined export volumes continue.

But the world's largest exporter, the breakdown of shipments to destination doesn't explain all of the weakness and with China says a lot about the State of the global economy.

Exports in the developed world was relatively good, with shipments in the United States rises 4.2% to the previous year despite the budget mess in Washington. But exports to emerging economies fell as the prospect of a tightening of monetary policy by the Federal Reserve chilled markets from Jakarta to Johannesburg. That could be a problem for China, which sends well less than half of its exports to the United States, EU and Japan.

Exports fell 0.3% to the previous year after Indonesia, for example, in September, while those fell 12.8% to South Africa.

"Also the statistical distortion of the underlying of one of China's external demand still pretty lackluster looks," said economist Wei Yao Société Générale.

China's competitiveness has declined, like a shrinking labor drives wages with private salaries rising 14% in 2012. The effect is by a stronger currency, which strengthened Yuan to 2.9% against the dollar this year.

But even than struggling exporters, China's imports have surprisingly good, stopped cutting the trade surplus to $15.2 billion in September from $28.5 billion in August. This could be at least some pressure on China, its currency continue to revalue to distract.

Raw material imports were particularly strong. Crude oil shipments rose 27.9% for the previous year in September, that China, the world's largest importer of oil. Iron ore imports rose by 14.7% to a record high.

This is good news for commodity giants like Australia, Canada and Brazil. Iron ore shipments are a further infrastructure and building boom in China, feeding, despite increasing concerns, whether the projects are profitable.

"Demand is being driven by the Government", said Fan Zhang, an economist at brokerage UOB KayHian. "It's infrastructure, all these raw materials used to."

Although Beijing has signaled that he wants to keep a tighter rein to local governments has it given their spending plans, green light, kept a stack of new Metro projects and away from the fresh curbs on the real estate market in the last few months.

In the future, China must more and more on this kind of domestic demand to leave. Gone are the days when double-digit export growth to the economy makes it could lean on.