In USD terms, both the exports and imports contracted by -6.2% y/y in Sep as declines narrowed compared to the preceding month.  

We think the export outlook is starting to improve for China but the pace of recovery is still subject to risks including the tighter financial conditions in the developed markets, global inflation and geopolitical tensions. Meanwhile, the smaller improvement in imports despite relatively high volume of commodity purchases in Sep, may continue to suggest a poor domestic demand outlook in general. 

With base effect turning more favourable for the rest of the year, the export and import performance are likely to continue to improve. As such, we revise our forecast for exports and imports to -4.5% (from -6.0%) and -6.0% (from -7.0%) respectively in 2023.