China's imports and exports were much stronger than expected in November, robust numbers that could clear the way for the central bank to raise interest rates as soon as this weekend.
The data also offered a double-hit of healthy news for the global economy: a reminder that Chinese demand was still growing apace and an indication that the US and European recoveries were picking up steam.
China has been slow to tighten monetary policy this year, partly for fear of a double-dip recession in the developed world.
But with inflation now running at its fastest clip in more than two years and external demand on a firmer footing, many analysts are looking for a more aggressive mix of rate rises, lending restrictions and higher reserve requirements for banks.
"Resilient trade is supportive to increase policy tightening, and China's economic policy is shifting from growth to taming inflation, mopping up liquidity and curbing asset bubbles," said Isaac Meng, an economist with BNP Paribas in Beijing.
November imports rose 37.7 per cent from a year earlier to easily top forecasts for a 24.2 per cent increase, powered by China's voracious appetite for commodities.
Chinese imports have developed a habit over the past two years of surprising on the upside. In that respect, the 34.9 per cent jump in exports, above market expectations for a 22.0 per cent increase, was the bigger surprise.
"It shows the US economy is recovering well," said Wang Han, an economist at CEBM in Shanghai. "The central bank will raise reserve requirements this weekend and then interest rates next week."
China's export strength was broad-based. Exports to the United States were up 32.2 per cent, the strongest rise since August. Shipments to the European Union, its biggest trading partner, climbed 33.8 per cent.
On an annualised, seasonally adjusted basis, China's month-on-month export growth soared to triple digits, economists at Goldman Sachs said.
The trade data boosted the main Chinese stock index to close up 1.1 per cent at 2,841.04. It had been flat before the release of the data.
The volume of imports and exports both set monthly records, the customs authority said in a statement.
That left China with a hefty surplus of $22.9 billion in November, the seventh straight month of impressive trade performance. During that stretch, its average surplus has been $22.2 billion.
That could fuel fresh criticism of China's exchange rate regime. The United States and Europe say that an undervalued currency gives Chinese exporters an unfair advantage in global markets.
Even without criticism, rising inflation in China could put upward pressure on the yuan.
"The trade surplus data comes at a time when domestic inflation is rising, indicating that the pace of yuan appreciation against the dollar could quicken next year," said Lu Zhengwei, an economist at the Industrial Bank in Shanghai.
Chinese consumer price inflation may have hit 5.1 per cent in the year to November, a 28-month high, state media reported today.
Reuters