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China Trade Surplus Widens in October

By Joe McDonald, AP Business Writer

BEIJING -- China's export growth accelerated in October in a fresh sign the world's second-largest economy is recovering from a painful slump, but the commerce minister warned that exporters face tough conditions in coming months.

Exports rose 11.6% from a year earlier, up from the previous month's 9.9% rate, data showed Saturday. Import growth held steady at 2.4%.

The improvement is a positive sign for the ruling Communist Party, which is holding a congress to hand power to younger leaders who might benefit from an economic uptick.

Still, the commerce minister warned that Chinese exporters face tough conditions ahead due to weak global demand and rising operating costs.

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"The trade situation will be relatively grim in the next few months and there will be many difficulties next year," Chen Deming told a news conference.

Analysts say a modest recovery is under way from China's deepest downturn since the 2008 world financial crisis. But they say it will be gradual and too weak to drive global growth without improvement in the United States and Europe.

Data reported Friday showed Chinese auto sales, factory output and investment also improved in October.

Stronger exports will help manufacturers that were battered by last year's slump in global demand. Thousands closed and survivors slashed payrolls, raising the danger of unrest as Communist leaders tried to enforce calm ahead of the leadership transition.

The import weakness meant China's global trade surplus widened by nearly 90% over a year ago to $32 billion -- the highest monthly level this year.

Chen, the commerce minister, also warned that "growing trade protectionism" might hurt exporters.

World leaders pledged after the 2008 crisis to avoid steps that might hinder trade and hamper a recovery. But Beijing and trading partners including the United States, Europe and Japan have raised tariffs on goods including autos and solar panels in a series of disputes over market access, subsidies and other issues.

Beijing set a target of 10% trade growth this year, but it looks increasingly unlikely the country can reach that after total trade rose only about 6% for the first 10 months.

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