Thursday, February 8, 2018

China's global imports soar, trade surplus with US narrows

 

Beijing, China /AFP/. China's global imports soared and exports remained strong in January, while its trade surplus with the United States narrowed after reaching record levels last year, official data showed Thursday.

Imports for the month surged 36.9 percent year-on-year, pointing to robust demand in the world's number two economy to start the year.

China's continued economic strength flies in the face of the authorities' campaign to limit credit growth and reduce winter pollution by cutting industrial production.

The wave of imports -- buoyed by rising commodity prices -- greatly surpassed analyst estimates of 10.6 percent growth for the period, according to Bloomberg News.

Analysts attributed part of the rise to the Chinese New Year holiday falling in February this year, as opposed to January last year.

Even so, the "outturn exceeded expectations," wrote Julian Evans-Pritchard, China economist at Capital Economics.

China's exports remained strong as well, posting 11.1 percent growth for the month, beating analyst expectations of 10.7 percent.

The humming global economy continues to eat up China's products, giving its leaders more time to achieve their goal of transitioning the economy from one driven by exports and investment to a more stable model propelled by domestic consumption.

China's trade surplus with the US dropped from $25.6 billion in December to $21.9 billion in January. The figure is roughly equal to the trade surplus China posted with the US in the same period last year.

The falling surplus is good news for Beijing, which has been under attack by US President Donald Trump for months.

Still analysts worry the large deficit will compound sensitive trade relations between the two countries.

"The uncertainty surrounding Sino-US trade ties remains a key potential downside risk in the near term," said Betty Wang, senior China economist at ANZ bank.

Earlier this week, the US Commerce Department reported the US trade deficit surged to $375.2 billion during Trump's first year in office, its highest level in nearly a decade.

China's calculations for last year, released in January, differ, showing a trade difference of $275.8 billion -- still a record high.

The Trump administration has aimed to reduce the deficit by levying aggressive tariffs on a variety of Chinese goods.

Last year, China held off from taking tit-for-tat measures, but Beijing has indicated it may not practise the same restraint in coming months.

This week China launched an anti-dumping investigation into sorghum imports from the US, which the US shipped China almost $1 billion of last year.

That was a sliver of the $14 billion in US soybean imports, which analysts forecast could be in China's crosshairs as well.

"We cannot exclude the possibility that China may retaliate by focusing on the US' agricultural exports, including soy exports," ANZ's Wang wrote.

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