Page last updated at 08:19 GMT, Wednesday, 14 October 2009 09:19 UK

Decline in Chinese trade slowing

Graph of Chinese exports

Chinese official export figures for September have suggested improvements in economies in the rest of the world.

Exports from the world's third largest economy fell to $115.9bn (£73bn), which was down 15.2% from September 2008, but the smallest fall in nine months.

China's $596bn stimulus package has helped prop up its economy, but it needs a global recovery to boost trade.

Imports fell 3.5% to $103bn, which was the smallest decline since imports began to slide in November 2008.

The slowing decline has been taken as a sign that the stimulus package is working.

China's trade surplus stood at $135.5bn (£85bn) for the first nine months of 2009, falling 26% compared with the same period a year ago, according to the General Administration of Customs.

Chris Hogg
By Chris Hogg, BBC Shanghai correspondent

Most people accept that China is now enjoying an economic recovery. What they want to know is, is that recovery sustainable?

September's trade figures are encouraging. Exports and imports fell, as they have done every month since late last year, but the rate of decline wasn't as bad as the month before.

The government's stimulus package has helped boost domestic demand. It has increased China's appetite for imports of commodities needed for the big infrastructure projects now under way.

The effects of that stimulus package will last for some time, but not for ever, so the challenge for the country's policymakers is to find alternative ways to keep people here working and spending.

"Overall, export performance will be much better in the months to come. I think it's going to be sustainable and it's going to accelerate," said Dong Tao, an economist at Credit Suisse in Hong Kong.

"There are some rush orders coming to China for Christmas, so I expect probably a pretty strong rebound in November and December," he said.

The slowing decline in imports was mainly a result of record iron ore shipments to China of 64.6 million tons in September.

The iron is needed to make steel, which is in demand as the stimulus package boosts construction.

Between January and August, China's total trade with the European Union fell 19.4% while trade with the US fell 15.8% and trade with Japan declined 20%.

China's Vice Minister of Commerce Zhong Shan recently said that China's exporters were still facing a tough time.

To support exporters, China has raised value added tax rebates on exports several times in the past year, increased tax refunds and improved export credit insurance.

The central bank has also effectively halted the yuan's rise against the dollar since July 2008.

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