The narrowing trade surplus reflects some weakness in electronics exports and rising commodity imports but it's unlikely to be enough to relieve pressure from the U.S. in the short term.
Production growth is being driven by strong export demand and rising consumer spending at home. There will be some moderation in the fourth quarter because of slower investment growth and some temporary weakness in U.S. demand.
There are two stories at work. The first is that we see surprising strength in exports. But imports are definitely weaker than I expected.
Consumption is still rising at a much slower pace than investment and people are still saving too much. Retail sales have been growing strongly in the cities but the government is trying to put more money into the pockets of rural areas which is where there's more potential for growth.