Chinese exports last month surged more than forecast, data showed yesterday, in a fresh sign of improvement in the world’s No. 2 economy as leaders prepare for possible trade stand-offs with US President Donald Trump.
Officials at the Chinese Customs Administration said overseas shipments jumped 7.9 percent year-on-year to US$182.8 billion, easily outstripping the 3.2 percent tipped in a survey of economists by Bloomberg News.
It also reversed December last year’s 6.1 percent plunge.
Imports also exceeded expectations, rising 16.7 percent to US$131.4 billion, compared with an expected 10 percent increase. The trade surplus climbed to US$51.3 billion, beating estimates by more than US$2 billion.
“Chinese trade values have been picking up in recent months thanks to a revival in global manufacturing, the continued strength of China’s domestic economy and the rebound in global commodity prices,” Julian Evans-Pritchard of Capital Economics said.
However, he said that “it’s likely that much of the pick-up last month was seasonal,” adding that “all of the pre-holiday rush to import goods and meet exports orders fell in January,” with the country stocking up before Lunar New Year, when most businesses close.
“The strong data was related to the global pick-up in growth in the US, Europe and also emerging economies,” Mizuho Securities Asia Ltd chief economist Shen Jianguang (沈建光) told Bloomberg News.
However, it can also be explained by a weakened yuan, which has made Chinese exports more affordable, Nomura Holdings Inc analysts said.
The yuan is wallowing near eight-year lows against the greenback as investors, frightened by a weaker Chinese economy and the prospect of better returns in the US, withdraw their cash from the country.
Exports “are benefiting from the depreciation of RMB’s real effective exchange rate over previous quarters,” Nomura said in a note.
While overall exports grew, China’s steel exports last month fell 23.8 percent year-on-year, customs said — the result of Beijing’s efforts to reduce steelmaking overcapacity after continuous pressure from the EU and the US, which have accused the Asian giant of dumping.
By far the world’s largest producer of steel, China last month exported 7.42 million tonnes of the product — less than the 9.74 million tonnes exported in January 2016 and the 7.8 million tons in December last year.
Despite optimistic assessments of the strong trade figures, most analysts agreed that Trump’s hawkish trade policy stance towards China posed a major risk to continued Chinese export growth this year.
The billionaire politician seemingly remains intent on following through with a series of election promises that included a review of global trade deals he says are unfair to the US.
“The exports outlook for China is good, except for the potential risk of a Sino-US trade war,” Shen said.
A high-ranking diplomat from an EU country told reporters that he believed a US-China trade war “would damage the Chinese economy, but still be manageable” — though one accompanied by trade frictions with the EU “would be potentially disastrous for China.”
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