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BEIJING, Oct 15 (Reuters) - China could be enjoying annual export growth again by the end of the year as a result of the government's domestic stimulus and a recovery in international demand, the Commerce Ministry said on Thursday.
Exports have been falling from year-earlier levels since last November, when global trade slumped after the surprise failure of Lehman Brothers. But data on Wednesday showed the year-on-year drop narrowing to 15.2 percent, the smallest decrease this year. [ID:nPEK367690]
"Going into the fourth quarter, we expect that the pace of decline in exports will narrow further, and I think we'll quite possibly see positive annual growth in some months," Yao told a regular news conference.
He noted in particular that the pace of decline in imports for processing into exports had slowed, suggesting companies were confident about China's export prospects.
Yao also pointed to a strong improvement in September imports, which fell just 3.5 percent from a year earlier. Again, it was the smallest decline this year.
Yao said the recovery indicated increasing homegrown demand, which the government hopes will take up the slack left by wilting exports.
"We expect full-year retail sales to maintain a growth rate of above 15 percent, with the economy relying more on domestic demand in the coming months," he said.
Annual retail sales have grown by more than 15 percent every month since May. Figures for September are due on Oct. 22.
Overseas firms' growing confidence in China was likely to lead to a continued recovery in foreign direct investment, he said.
FDI in September rose 18.9 percent from a year earlier, to $7.9 billion. But for the first nine months of 2009, FDI fell 14.2 percent to $63.8 billion. [ID:nBJB003553] (Reporting by Aileen Wang and Alan Wheatley; Editing by Ken Wills)