China's exports hold up despite US tariffs

02/11/2018 12:00 - 317 Views

Analysts claimed for yet another month that part of the explanation for strong exports to the U.S. is front-loading of shipments in anticipation of Mr. Trump's threat to raise tariff rates on $200 billion worth of Chinese goods to 25% from the current 10% in January if no deal is reached.

Import growth also defied forecasts for a slowdown, suggesting Beijing's growth-boosting measures to support the cooling economy may be starting to make themselves felt.

With the export outlook clouded by US tariffs and the Chinese economy expanding at the weakest pace since the global financial crisis, policymakers in Beijing have recently turned their focus to growth boosting measures, including increasing export tax rebates and pledging more support to private firms.

That figure is likely to be even higher for October, which was the first full month tariffs were in effect on $200 billion worth of Chinese imports.

Markets are now keeping their eyes on a much-touted meeting later this month between President Donald Trump and President Xi Jinping at the G-20 in Buenos Aires, Argentina.

China's imports surged 26.3 percent year on year in October, while exports rose 20.1 percent, with the pace of growth both beating expectations, data showed Thursday.

China's import and export growth in October both vastly exceeded expectations, and China's tradesurplus with the U.S. further expanded, which an expert said shows the US-initiated trade war does not help solve the trade imbalance problem and does not help to ease tensions.

"We think that President Xi's meeting with PresidentTrump at the end of November will not achieve positive results and as such the increase of the current tariff rate from 10% to 25% on $200 billion of USA imported goods from China is highly probable".

Washington and Beijing slapped additional tariffs on each other's goods on September 24 and the US has pledged to sharply raise the rate from 10 percent to 25 percent at the turn of the year.

Despite several rounds of USA duties this year, China's exports have been surprisingly resilient as companies ramped up shipments before tougher measures went into effect.

China exported $42.7 billion worth of goods to the U.S.in October, a 13.3% year-over-year increase, according to multiple news reports based on Chinese customs data.

The Foreign Trade Centre, which organised last month's Canton Fair, said on Monday that export orders to the United States declined 30.3 per cent from a year earlier by value.

USA orders for Chinese goods at the latest Canton fair dropped 30.3 percent from a year earlier by value, the fair's organizer said on Sunday, as higher US tariffs made goods from batteries to farm tractors costlier. Several rounds of talks this year have appeared to yield little progress.

Trade surplus stood at 233.63 billion yuan (about 33.76 billion US dollars) last month, expanding from 213.23 billion yuan in September, according to data released by the General Administration of Customs (GAC).

China's trade surplus with the United States was $31.78 billion in October, off a record high of $34.13 billion in September. September exports grew 14.5 percent year-on-year.

South Korea has become the largest long-distance importer of USA crude oil at 1.1 million t in September, its highest level ever.

"More importantly, it also reflects some of Beijing's promise to buy more - as a way to help soothe the trade conflict with the USA".

"Front-loading export activities should continue in November and December".

Chinese exports are also boosted by robust growth, both globally and in the US, said independent economist Andy Xie. Last year, Xi estimated that China would import $24 trillion worth of goods over the coming 15 years.
November 2, 2018
Source: Stock News Press
 
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