China Exports Up More Than Expected

BEIJING — China’s exports rose more than expected in August, data showed Sunday, bolstered by improving demand for the country’s goods in major markets.

The Customs Administration said Sunday that exports had risen 7.2 percent in August from the level of a year earlier and that imports had risen 7 percent, leaving the country with a trade surplus of $28.6 billion for the month.

The figures compared with market expectations in a Reuters poll of an increase of 6 percent in exports, an 11.3 percent rise in imports and a trade surplus of $20 billion.

“China’s August trade sustained the upward trend seen since July, in line with accelerating growth momentum and improving market sentiment, pointing to an upside bias” in third quarter growth in gross domestic product, the ANZ economists Liu Li-Gang and Zhou Hao said in a note after the data appeared.

After slowing in nine of the past 10 quarters, the Chinese economy has shown signs of stabilization, with surprisingly firm rebounds in trade in July and surveys in the past week showing manufacturing regaining momentum and growth in the services sector at a five-month high.

Investors had as recently as a month ago worried that China’s economy was slipping into a deeper-than-expected downturn, especially after its money market suffered an unprecedented cash crunch in June.

But policy makers have stepped in with measures to steady the economy, like quicker railroad investment and public housing construction and introduction of policies to help smaller companies with financing needs.

Attention now turns to other data for August due in the next two days, with investors looking to figures for industrial output, inflation, money supply and investment to further gauge the impact of those measures. G.D.P. data for the third quarter are due in October.

A Reuters poll shows factory output is expected to have grown an annual 9.9 percent in August, matching the January/February figure as the biggest increase of 2013, while investment should tick up and inflation stay muted.

The trade figures on Sunday showed exports of electronics, textiles and machinery rose in the month. Exports to members of the Association of Southeast Asian Nations jumped 30.8 percent in August, outpacing the July gains, while exports to the United States rose 6.1 percent, faster than the 5.3 percent gains seen in July.

Exports to the European Union rose 2.5 percent, little changed from July’s figure, while exports to Japan contracted for the seventh consecutive month.

“There is no doubt that the external demand is improving, especially in developed countries,” said Lu Zhengwei, chief economist at Industrial Bank in Shanghai. But “Emerging market economies are struggling even though advanced economies are on the mend. Many Chinese companies, such as steel firms, are exporting at losses.”

A Fight Over Coal Exports and the Industry’s Future

It’s part of a push by the nation’s coal industry, hobbled by plummeting demand as Americans turn to cleaner natural gas, to vastly expand what it sends to Asia and Europe. But the aggressive effort to rescue the $40 billion industry is running into fierce opposition from environmental groups, who say pollution caused by burning coal should not be exported.

The two sides have engaged in an increasingly pitched battle, in regulatory arenas and on the airwaves, scaring off some investors and raising concerns about the fate of the industry, which is seen as a key to economic growth in Western states like Montana and Wyoming.

“The future of the U.S. coal industry is at stake,” said Richard Morse, managing director at SuperCritical Capital, an energy consultancy. “Their future domestically is dim and demand growth internationally is very robust, so it is fair to say that a resuscitation of the industry has to come overseas.”

The future of the impoverished Crow Nation may also hang in the balance since it owns an enormous deposit of up to 1.4 billion tons of coal — more than the United States produces in a year. But before Cloud Peak can mine the land and send the coal to energy-hungry nations in Asia, it needs more export terminals to be built in the Pacific Northwest, and those have been delayed or, in some cases, scuttled after investors grew weary of the continued opposition from environmental groups.

Last week, the Sierra Club and other groups opened another phase in the battle, filing suit in a federal court in Seattle against Burlington Northern Santa Fe railway and several coal companies, saying coal dust escaping from trains has polluted rivers and lakes in Washington. The new export terminals, they say, would only bring more trains carrying coal to the ports and increase the amount of dust.

Coal’s share of electricity generation in the United States has fallen to under 40 percent in the last decade, from 50 percent. Annual production dropped 7 percent in 2012 to just over 1 billion tons, the lowest total in two decades, and the stock prices of many coal companies have been plummeting.

Cheap, abundant and cleaner natural gas produced in new shale fields has replaced much of the coal that American power plants once burned, and regulatory pressures are mounting to curb greenhouse gas emissions from coal combustion. That has left exports as the only sure growth engine for the declining American coal industry.

Last year, American coal exports set a record of 125 million tons in sales, roughly double the volume in 2009, with most of that going to Europe. Exports fell this spring because of slower Chinese demand for steelmaking coal. But energy experts say the big potential market for American coal remains in Asia, and several proposed Pacific Northwest export terminals would have the capacity to nearly double current exports.

For the Crow Nation, which is sitting on the reserves here, and many coal companies like Cloud Peak, exports could make the difference between just getting by and prospering.

While coal mining is the largest private sector provider of jobs, half the adult population is unemployed. Homelessness would be pandemic if it were not customary for three or four families to cram into small trailers so crowded that couples sometimes go to motels for moments of privacy and children struggle to do homework through a blare of television.

Three bright days a year come when families receive small bonuses from the tribe, thanks to one coal mine that operates on the reservation, to buy presents for Christmas and beads and tepee canvas for the tribe’s annual powwow. The Crow hope more bright days may be coming, although some express concerns about the damage more coal mines could do to archaeological sites.

Trade Deficit Narrows as Exports Increase

The gap between exports and imports shrank to $43 billion in February, down 3.4 percent from a revised $44.5 billion in January, the Commerce Department said on Friday. It was the smallest trade imbalance since December, when the gap had declined to $38.1 billion, the lowest point in nearly three years.

Exports rose 0.8 percent, to $186 billion, close to the record set in December. Stronger exports of energy products and autos offset declines in sales of airplanes and farm equipment.

Imports were flat at $228.9 billion, with the volume of crude oil falling to the lowest point since March 1996.

The deficit with China shrank to $23.4 billion, the lowest point in 11 months. Exports to the European Union were down 0.9 percent in February, compared with January.

Through the first two months of this year, the United States deficit is running at an annual rate of $524.5 billion, down slightly from the $539.5 billion imbalance last year.

Economists expect the deficit this year will narrow slightly, in part because of continued gains in energy exports. A narrower trade gap lifts growth because it means American companies are earning more from overseas sales while domestic consumers and businesses are spending less on foreign products.

The economy as measured by the gross domestic product grew at an annual rate of 0.4 percent in the October-December quarter. Economists say they believe economic growth strengthened in the January-March quarter to around 3 percent.

In addition to increases in energy exports, economists are hopeful that exports of other products will rise this year as well, helped by stronger growth in some major export markets.

That forecast is based on an assumption that the European debt crisis will stabilize, helping lift exports to that region, and that growth in Asia will rebound further. The outlook for Europe has been clouded recently by problems in Cyprus and new worries that the debt troubles could destabilize more countries.

Report Bolsters Case for Large U.S. Natural Gas Exports

The Obama administration has been cautious on whether to embrace large exports of gas out of concern that consumers who rely on gas for heating and cooking could see their utility prices rise. Higher exports could raise costs to manufacturers that now benefit from a glut of cheap gas, some economists warn, although huge terminal projects would generate thousands of construction jobs and gas could be a lucrative export earner.

The new report, prepared by NERA Economic Consulting for the government, concluded that domestic gas prices would not rise sharply as a result of exports and that expanded export revenue would generally help most Americans.

Noting that gas exports could produce up to $47 billion in new economic activity in 2020, when many new terminals would be up and running, the report said, “welfare improvement is highest under the high export volume scenarios because U.S. consumers benefit from an increase in wealth transfer and export revenues.”

Only a decade ago, it appeared that the country’s domestic gas supplies were drying up, and that huge amounts of expensive gas in liquefied form would have to be imported from Trinidad, Africa and the Middle East. But over the last few years, a technological revolution has occurred in shale gas fields across the country, producing a glut that has driven the price of natural gas down by two-thirds since 2008.

The report, the second Energy Department study this year, is likely to be challenged by manufacturing and chemical companies like Dow Chemical warn that large-scale exports that raise domestic gas prices would hurt their ability to compete with foreign firms.

Yet oil and gas companies are eager for exports to bolster the lagging price of natural gas, and the report is likely to spur a competitive lobbying campaign for regulatory approval of export terminals. Executives in the oil and gas industry were enthusiastic about the report. “It’s great news,” said Rodney Waller, a senior vice president at Range Resources, a natural gas producer. “It’s encouraging to see that experts are joining the expectation that we are in a global marketplace and the United States has a huge opportunity to generate economic growth and at the same time reduce our energy costs.”

But several powerful members of Congress, including Senator Ron Wyden, the Oregon Democrat who is in line to be the next chairman of the Senate Energy and Natural Resources Committee, have opposed large-scale exports.

In a recent letter to the energy secretary, Steven Chu, Senator Wyden noted the importance of the country’s newfound gas wealth to “improve the economic competitiveness of American manufacturers” and that “U.S. law has long held that imports and exports of energy must be considered differently than other commodities.”

The Sierra Club and other environmental groups have joined the opposition to exports in a bid to limit domestic production, which is increasingly dependent on hydraulic fracturing, a technique that blasts open shale rock with water, sand and chemicals to release gas and oil. Environmentalists say drinking water supplies can be put in jeopardy, a charge disputed by the oil industry.

The Center for Liquefied Natural Gas, a trade group whose members include ExxonMobil, Sempra Energy and Royal Dutch Shell, has argued that more gas exports will bolster domestic gas production and with it expand demand for oil field equipment and steel piping.

The Energy Department report noted that large exports of gas would produce “some shifts in output by industrial sectors” and “the electricity sector, energy-intensive sector and natural gas dependent goods and services producers will all be impacted by price increases.” Industries that are likely to be most impacted, economists say, would be producers of chemicals and fertilizers.

But the report said that natural gas exports could produce $10 billion to $30 billion of annual export revenue. The country now exports some gas by pipeline.