BEIJING, (Reuters) – China’s October export growth slowed but beat predictions as booming holiday season demand offsets some of the pressures faced by the second-largest country in the world.

However, imports fell short of analysts’ expectations. This likely points to weakness in domestic consumer demand.

Inbound shipment growth rose 27.1% to October, compared with September’s 28.1% increase. Reuters polled analysts and forecast that growth would slow to 24.5%.

Zhiwei Zhiwei Zhang is the chief economist of Pinpoint Asset Management. He said that strong exports will help mitigate the weakness in the domestic economy and give the government more flexibility to adjust its economic policies.

He stated that the government could afford to hold off until the end of the year to relax monetary and fiscal policy, as exports act as a buffer against the slowdown.

Recent data points to a slowdown in manufacturing. An official survey revealed that factory activity declined for another month in October. However, growth in industrial output fell to its lowest point since March 2020. This was the beginning of the pandemic.

Some supply restrictions have begun to ease under the heavy intervention of government agencies in recent weeks. Heavy government intervention has led to a reduction in the power crunch, which was caused by an increase in industrial demand and a lack of coal.

Premier Li Keqiang announced Tuesday that China would support the industry sector in light of the economic downturn.

Exports increased by 20.6% in October compared with a year prior. It was an increase of 17.6% in September, but not the expected rise to 25%.

China saw its imports fall to the lowest level since September 2018 in October, while domestic coal production soared. On a decreasing demand, iron ore purchases fell for the second month.

China’s trade surplus was $84.54B, higher than what the poll predicted at $65.55 billion. It also surpasses September’s surplus of $66.76B.

From a year ago, the economy of the country grew by 4.9% during the July-September quarter. It was the worst reading since the third quarter last year.

According to Reuters calculations based upon customs data, China’s trade surplus was $42 billion lower than September’s.

U.S. Trade Representative Katherine Tai said last month she would exclude certain Chinese imports from tariffs. She also pressed Beijing for not keeping some of the promises in Phase 1 of the Trump trade deal.