China exports shock regardless of US tariffs

Gladys Abbott
November 12, 2018

Still, in October exporters continued to hurry goods across the Pacific, with China's exports to the USA surging 13.2 percent from the same period previous year, according to the data released by China's customs administration. Chinese exports to the United States rose 13.2 per cent, but imports from the USA fell 1.8 per cent as the higher tariffs imposed by China have put off local importers.

For trade with all countries, China's surplus was around $34 billion for October, compared with forecasts of $35 billion and September's $31.69 billion.

"The strong export growth in October was buoyed by front-loading activities by exporters", said Ms Iris Pang, Greater China economist at ING.

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.

Governments of the two biggest global economies have raised tariffs on billions of dollars of each other's goods in the fight over US complaints about Chinese technology policy.

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That includes a 10 per cent charge on United States dollars 200 billion of Chinese goods that is due to rise to 25 per cent in January. Trump has railed against China over intellectual property theft, entry barriers to USA business and the gaping trade gap.

China's global exports rose 12.6 percent to $217.3 billion in October, down from September's 14.5 percent growth. Washington, Europe and other trading partners complain plans such as "Made in China 2025", which calls for creating Chinese global champions in artificial intelligence, robotics and other fields, violate Beijing's market-opening obligations.

President Xi said at the opening of an import expo this week that he expects China to import $30 trillion worth of goods and $10 trillion worth of services in the next 15 years. China had cut import taxes on more goods, including machinery, from November 1, on top of reductions implemented earlier this year, to reduce costs for consumers and companies. Beijing agreed in May to narrow its trade gap with the United States by purchasing more American soybeans, natural gas and other exports. This switching has been in reaction to Trump's tariffs.

Chinese exports are also boosted by robust growth, both globally and in the US, said independent economist Andy Xie. Imports of European goods increased 14.1 percent to $21.6 billion. She said exporters might try to sell more to Europe or other Asian economies, but those markets also might be hurt by USA import controls.

Liu Liu, analyst at Chinese investment banking firm CICC, said the risk of slowing export growth was higher now than before, based on the latest manufacturing purchasing managers index (PMI).

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