Can China’s export surge save the day?

The 8.7% year on year jump in Chinese exports in August is the best news President Xi Jinping’s economy has had in months.

Coming in markedly higher than the 6.5% increase most economists expected, the data suggests that overseas shipments are proving to be a vital growth driver at a moment when the world’s biggest trading nation most needs it.

As analysts at Nomura Holdings put it, “the continued strong run of exports may actually delay near-term policy support.”

China seems a clear winner from stubbornly high global inflation, which is bolstering the nation’s competitiveness in foreign markets. Economist Wei Yao at Societe Generale noted that “it’s actually offering some support to China’s growth.”

The question, of course, is whether the export engine can continue firing to offset strong domestic headwinds. They include a deepening property crisis that’s undermining business and household confidence, stagnant wages, deflationary pressures and high youth unemployment.

The bad news is that export gains don’t appear sizable enough to overcome the downward pressure elsewhere in the economy in the long run. The good news: in the short run, rising exports could give Xi’s team greater latitude to implement much-needed structural reforms.

Xi’s team is still struggling to find ways to stabilize real estate markets, repair the balance sheets of giant property developers and strengthen local government finances. Mainland property markets, noted Standard Chartered Bank CEO Bill Winters, haven’t yet found a floor.

“We know that the underlying source of a lot of the confidence questions is the property market, and the property market has not yet completely bottomed out, so it’s been a slow grind down,” Winters told CNBC.

He added