STOCK MARKET WATCH -- Monday, 8 September 2014

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39. China Posts Record Surplus as Exports-Imports Diverge

http://www.bloomberg.com/news/2014-09-07/china-s-trade-surplus-climbs-to-record-in-august.html


China’s trade surplus climbed to a record in August as exports (CNFREXPY) rose on the back of increased shipments to the U.S. and Europe, while imports fell for a second month as a property slump hurt domestic demand.

Exports increased 9.4 percent from a year earlier, the Beijing-based customs administration said today, compared with the 9 percent median estimate in a Bloomberg survey. Imports unexpectedly dropped 2.4 percent, leaving a trade surplus of $49.8 billion.

Divergent directions for exports and imports show China is some way from providing the global growth boost that IHS Inc. this month forecast will see it eclipse the U.S. economy in 2024. Languishing domestic demand underscores risks to the government’s economic-growth target this year of about 7.5 percent as home prices and construction fall, boosting chances of additional stimulus.

“A targeted cut in mortgage rates is more and more likely,” said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong. “If the weakness in the property market can’t be reversed, it’s difficult for the government to reach its annual growth target of 7.5 percent.”