Friday, 19 October, 2018

China’s Exports, Imports Grow, as Does Trade Surplus With US

Donald Trump shakes hands with Xi Jinping Modal Trigger Donald Trump shakes hands with Xi Jinping. AFP Getty Images
Ginger Lawrence | 12 October, 2018, 19:44

China's trade surplus with the United States surged to a record high of $34.13 billion in September from the August figure of $31.05 billion, Chinese customs data reported on Friday, according to Reuters.

The latest China trade data is sure to remain a sore point with Washington.

The two countries imposed new tariffs on a massive amount of each other's goods mid-September, with the U.S. targeting $200 billion in Chinese imports and Beijing firing back at $60 billion worth of United States goods.

"With global growth likely to cool further in the coming quarters and U.S. tariffs set to become more punishing, the recent resilience of exports is unlikely to be sustained".

China's overall trade - what it buys and sells with all countries including the United States - logged a $31.7 billion surplus, as exports rose faster than imports.

The increase, the result of both increasing exports from China to the USA - up 14.5 percent from the same month past year - and a decline in the goods that China is buying from the U.S. The president claimed he does not believe Beijing are ready to begin discussions in a Fox News interview earlier this week.

The volume of exports from China to Russian Federation has grown by nearly 13 percent, exceeding $35 billion.

A weaker yuan CNY=CFXS, which has depreciated about 6 percent against the dollar this year, may have taken the sting out of the tariffs imposed on $250 billion of exports to the United States.

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Analysts said last month's strong export growth - which might indicate US tariffs are not biting much yet - is unlikely to be sustained.

The world's largest trading nation got off to a strong start this year, but its economic outlook is being clouded by the escalating US trade dispute and cooling domestic demand.

"The front-loading impact is quite obvious to me", said Betty Wang, senior China economist at ANZ in Hong Kong. When President Trump first hit China with 25 per cent tariffs on $50 billion of exports in June, Beijing retaliated with $50 billion of tariffs of its own.

"I have a lot more to do if I want to do it". "If China wants the surplus to come down, they have to embark on structural reforms".

China has steadfastly denied that it has manipulated the yuan to cope with the tariffs.

"It's obvious that the immediate effects of the trade war are the exact opposite of what the Trump administration had been planning", said Andrew Polk of Trivium China, a Beijing-based economics research firm.

The IMF has cited the trade war as one of the reasons it lowered its 2019 growth forecast for China, which is set to see its slowest expansion since 1990.