In September, China's exports and imports experienced unexpectedly slow growth.

• In U.S. dollar terms, China's exports increased by 2.4% in September compared to the previous year, while imports rose by 0.3%, according to customs data released Monday.
• According to a Reuters poll, both figures fell short of analysts' expectations.
• Despite the sluggish consumer spending and real estate market in China, exports have remained a positive aspect of the economy.

In September, China's exports and imports did not meet expectations, causing worry about one of the economy's few positive aspects.

In U.S. dollar terms, exports increased by 2.4% in September compared to the previous year, while imports rose by 0.3%.

According to Reuters polls, analysts had predicted that China's exports would increase by 6% year-on-year in U.S. dollar terms in September, while imports were expected to rise by 0.9% year-on-year in the same month.

In recent years, China's economy has been hindered by weak consumer spending and a real estate market downturn, but exports have remained a key factor in driving growth.

Next year, it will be challenging for China's exports to maintain a robust growth rate due to heightened trade tensions, according to Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. He emphasized that the change in fiscal policy stance, as announced in a weekend press conference, is crucial for sustaining growth in the coming year.

Electric cars, among other products, have faced increased tariffs from both the U.S. and the European Union when they are made in China.

In September, China's exports to its largest trading partner, the U.S., increased by 2.2% compared to the previous year, while U.S. imports to China rose by 6.7%, as per CNBC's analysis of official data.

Last month, import volumes decreased, but they are predicted to increase in the near future due to increased fiscal spending, which will boost demand for industrial goods, according to Zichun Huang, a China economist at Capital Economics, in a note on Monday.

Huang stated that he believes the finance ministry's increase in fiscal expenditure will stimulate construction activity and increase demand for industrial commodities, at least temporarily.

On Saturday, China's Ministry of Finance suggested the possibility of increasing the fiscal deficit, but did not specify the extent of such support.

The Association of Southeast Asian Nations received a 5.5% increase in exports from China, while imports rose by 4.2%. Additionally, China's exports to the European Union increased by 1.3%, but imports decreased by 4%.

Imports from BRICS partner Russia decreased by 8.4%, while exports to Russia increased by 16.6%, according to the analysis.

In September, China's overall auto exports grew by 25.7% year-on-year, but the growth of shoes, toys, and smartphones fell. On the other hand, home appliances, integrated circuits, and ships experienced export growth.

In September, China's crude oil imports decreased by 10.7% in U.S. dollar terms compared to the same period last year, while natural gas and coal imports increased.

Beijing's efforts to increase food supplies and access to rare earths have been reflected in the latest data, as China's rare earths trade continues to decline. In September, exports of rare earths fell by more than 40% from the previous year, while imports decreased by approximately 9%.

Nearly 39% increase in the intake of soybeans, a key component in livestock feed, was observed.

Lackluster demand

The inflation rate, which was released on Sunday, indicates that the Chinese economy is facing further challenges in terms of domestic demand.

In September, the core consumer price index, which excludes volatile food and energy prices, increased by 0.1% compared to the same month last year. This was the slowest rise since February 2021, according to the Wind Information database. Despite the Mid-Autumn Festival in September and the Golden Week holiday that began on October 1, tourism-related prices fell by 2.1% year-on-year.

The National Bureau of Statistics of China will release the third-quarter GDP data, along with retail sales, industrial production, and fixed asset investment for September, on Friday.

Beijing has increased its stimulus announcements, but has not provided enough fiscal policy details, causing uncertainty among investors. As a result, Chinese stocks have experienced significant fluctuations.