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China's exports hold up despite US tariffs

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AFP Beijing
Last Updated : Nov 08 2018 | 2:00 PM IST

China's exports to the United States and the rest of the world grew more than expected in October, official data showed Thursday, as its traders apparently rushed shipments across the Pacific ahead of higher tariffs.

Relations between the world's top two economies have soured sharply this year as US President Donald Trump slapped roughly half of Chinese imports with higher taxes.

Top Chinese officials are currently in Washington, with hopes that those talks could pave the way for a breakthrough on trade later this month when Trump meets Chinese President Xi Jinping at the G20 summit in Argentina.

Still, in October exporters continued to hurry goods across the Pacific, with China's exports to the US surging 13.2 per cent from the same period last year, according to the data released by China's customs administration.

"October's surprisingly strong export performance seems to have been partly due to a continuous front-loading effect and is unlikely to be a long-term trend," said Betty Wang, China economist at ANZ.

China's trade surplus with the US fell to USD 31.8 billion in October, from a record USD 34.1 billion in September.

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October marked the first full month of US tariffs on USD 200 billion of Chinese goods -- but the tax rate is set to jump from 10 per cent to 25 per cent come January.

Trump has repeatedly boasted the US could not lose a trade war with China, but Beijing's retaliatory tariffs on American goods have been more damaging so far.

China's imports from the US fell 1.8 per cent in October on-year, while its surplus with the US expanded to USD 258 billion for the first 10 months of the year.

Analysts estimate the upcoming meeting of the two heads of state will fail to resolve the friction.

"We do not expect the sideline meeting of Xi and Trump during the G20 would be positive," said Iris Pang of ING Bank.

"We just hope that the meeting won't create further damage to the trade relationship," Pang told Bloomberg News.

China's overall trade -- what it buys and sells with all countries including the US -- logged a USD 34 billion surplus for the month.

Exports jumped 15.6 per cent for October on-year, beating the 11.7 per cent forecast by Bloomberg News, while imports rose 21.4 per cent on-year, well above the forecast 14.5 per cent.

"While shipments to the US held up well, those to other parts of the world grew even faster," said Louis Kuijs of Oxford Economics.

"Global demand may be holding up better than feared, while a weaker Chinese yuan is also helping the country's exporters."

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First Published: Nov 08 2018 | 2:00 PM IST

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