Wed, May 09, 2018 - Page 10 News List

China exports beat expectations despite US trade spat

Reuters, BEIJING

Container ships wait at the Qingdao Qianwan Container Terminal in China on Monday.

Photo: Bloomberg

China’s exports last month rebounded more strongly than expected after a surprise drop in the previous month, suggesting that global demand remains relatively resilient and providing a cushion to the economy amid a heated trade dispute with the US.

Imports also grew more robustly than expected, signaling China’s domestic demand is holding up well, good news for policymakers looking to soften the blow from any trade shocks.

However, some analysts said the strong showing was mostly seasonal and that the global export recovery might have already topped out.

“Shipments still look healthy, but today’s data does point to a softening in external demand recently,” Capital Economics senior China economist Julian Evans-Pritchard wrote in a note. “The backdrop of the ongoing trade negotiations between China and the US is one in which global growth has already peaked and China’s export performance is waning as a result.”

The world’s two largest economies have threatened each other with tariffs on tens of billions of dollars’ worth of exports, leading to worries that Washington and Beijing might plunge into a full-scale trade war that could damage global growth and roil financial markets.

China’s exports last month rose 12.9 percent from a year earlier, beating analysts’ forecasts for a 6.3 percent increase and snapping back from a 2.7 percent drop in March that economists believe was heavily distorted by seasonal factors.

The heated row with Washington and threats of tit-for-tat punitive measures on trade and investment have added to concerns about an economic slowdown in China this year as Beijing continues its campaign to reduce risks to the country’s financial system.

High-level discussions between the two sides in Beijing last week appeared to make little substantive progress in defusing trade tensions apart from an agreement to hold more talks.

China’s top economic official is to visit Washington next week to resume trade talks with US President Donald Trump’s administration, the White House said on Monday.

A Reuters report citing sources said China had offered to buy more US goods and lower tariffs on some goods, including cars.

However, the Trump administration has drawn a hard line, demanding a US$200 billion cut in the Chinese trade surplus with the US by 2020, sharply lower tariffs and advanced technology subsidies, according to people familiar with the top-level US-China talks on Friday last week.

Highlighting the challenge of significantly reducing that gap any time soon, China’s trade surplus with the US widened to US$22.19 billion last month, from US$15.43 billion in March, according to Reuters calculations based on customs data released yesterday.

For January to last month, it rose to US$80.4 billion, from about US$71 billion in the same period last year.

China’s exports to the US last month rose 9.7 percent from a year earlier, slowing from a 14.8 percent rise in the first quarter. Its imports from the US rose 20.3 percent, the fastest growth in three months.

Export growth was led by a 20.7 percent increase in shipments of high-tech products, led by mobile phone exports.

Economists at ANZ said some Chinese exporters might be accelerating electronics shipments amid the tariff threats.

China’s move to higher-value exports is clear, with shipments of lower-end products, such as shoes and apparel, declining year-on-year, but its strategic tech sector is firmly in the crosshair of the White House.

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