China's surprising 9.9 percent increase in exports in September was not because of an over abundance of iPhone 5 shipments to the U.S.
There were 21 working days in September 2012, the same as September 2011. Mobile phone exports did surge to $9.7 billion last month from $8.1 billion in September 2011, but that increase can only explain 10 percent of the rise in total exports, says Zhiwei Zhang, an economist at Nomura Securities in Hong Kong. Total exports rose to $186 billion overall.
China's exports growth picked up across a wide range of goods. For example furniture exports growth rose to 46 percent year over year in September from 28 percent in August, footwear exports rose 10 percent from -3 percent, and hi-tech product exports growth climbed to 9.5 percent from 1.7 percent.
It remains to be seen how sustainable the surge in exports will be in coming months, but Zhang said it is unlikely due to the iPhone.
Moreover, September export data shows that with the exception of shipments to the EU, broad-based improvement by country was observed. For example, exports to the U.S. rose to 5.5 percent on year from 3 percent in August and 0.6 percent in July. Exports to Japan recovered somewhat, rising 2.2 percent from a -6.7 percent in August, and exports to southeast Asian countries rose to 25.5 percent year over year from 10.3 percent in August.
Commodity exporters also gained in the month: exports to Brazil rose to 13.7 percent from -14 percent in August; exports to Australia rose by 15 percent versus -0.6 percent in August, and exports to South Africa rose by 20.5 percent from -2.6 percent. Those are big gains in markets that have little iPhone impact.
Overall, the first three quarters of the year have seen China exports grow by 7.4 percent year over year and imports by 4.8 percent, considerably short of the 10 percent target but comparable with Barclays Capital's forecasts of 5.7 percent export growth and 5.4 percent import growth.
Since QE3 was launched in the U.S. in mid-September, the iShares FTSE China Xinhua 25 (FXI) exchange traded fund has outperformed both the S&P 500 and the MSCI Emerging Markets index. FXI is up 9.08 percent since Sept. 13, while the S&P is up 0.8 percent and the MSCI Emerging Markets index is up 2.8 percent.
Over the last three months, FXI is up 13.51 percent, while the SPDR S&P 500 (SPY) ETF is up 7.53 percent and the iShares MSCI EM (EEM) ETF is up 9.18 percent. Year to date, FXI is underperforming both the S&P and MSCI EM indices, up just 5.6 percent. The MSCI China index is up 9.56 percent, however, underperforming the S&P 500.
