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Exports grow at slowest pace in 5 months, miss forecast

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Imports also undershoot, underline weak domestic demand

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Export volumes remained resilient, analysts said

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Trade barriers could undercut efforts to lift growth

(Recasts, adds analyst comment in paragraphs 5, 6, 11, 16 and

17, graphics, bullets)

By Joe Cash

BEIJING, Oct 14 (Reuters) - China's export growth slowed

sharply in September while imports also unexpectedly

decelerated, undershooting forecasts by big margins and

suggesting manufacturers are slashing prices to move inventory

ahead of tariffs from several trade partners.

Export momentum had been one bright spot for the Chinese

economy that has struggled to gain traction due to weak domestic

demand and a property market debt crisis, adding to the urgency

for stronger stimulus.

Outbound shipments from the world's second-largest economy

grew 2.4% year-on-year last month, the slowest pace since April,

customs data showed on Monday, missing a forecast 6.0% increase

in a Reuters poll of economists and a 8.7% rise in August.

Imports edged up 0.3%, missing expectations for a 0.9% rise

and softer than 0.5% growth previously. The weak data does not

bode well for exports in coming months as just under a third of

China's purchases are parts for re-export, particularly in the

electronics sector.

"Export growth slowed last month but remained resilient,

with volumes still rising at a double-digit pace," Zichun Huang,

China economist at Capital Economics said. "Further ahead,

though, growing trade barriers are likely to become an

increasing constraint."

"The pivot toward monetary easing should also help support

demand among China's trade partners. But China's export success

is prompting increasing trade restrictions from other countries,

which threatens to dampen longer-term export growth," she added.

The European Commission on Oct. 4 saw its motion to impose

additional duties on electric vehicles built in China of up to

45% pass in a divided vote of EU member states, joining the U.S.

and Canada in tightening trade measures against China.

China's overall trade surplus narrowed to $81.71 billion in

September from $91.02 billion in August and missed a forecast of

$89.80 billion.

Manufacturing activity shrank sharply in September,

according to a recent factory owners' confidence survey, with

new export orders falling to their worst in seven months.

Analysts have attributed previous months' strong export

performance to factory owners slashing prices to find buyers.

"Export growth in the fourth quarter is still likely to

remain positive, but in the context of slowing external demand,

the downside risk of exports is large," said Wang Qing, chief

macro analyst at Oriental Jincheng, adding that manufacturing

activity was way below the average for the last 10 years.

Last week, the head of China's state planner said he was

"fully confident" of achieving the government's full-year growth

target of around 5%.

On Saturday, Chinese officials announced plans to ramp up

debt issuance to aid local governments in managing their debt

problems and provide increased support to low-income earners.

However, they did not state the size of the fiscal stimulus at

the highly anticipated news conference, disappointing markets.

Analysts anticipate it will take a long time to restore

consumer and business confidence and get the $19 trillion

economy on a more solid footing. A housing market recovery, in

particular, could be a long way off.

"The change of fiscal policy stance as indicated by the

press conference over the weekend is critical as a pillar for

growth next year," said Zhiwei Zhang, chief economist at

Pinpoint Asset Management."

"Looking ahead it would be difficult to sustain strong

export growth into next year, as trade tension heightens."