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China’s trade surplus with the US grew in 2018 but tariffs bite
BEIJING, Jan 14, 2019 (BSS/AFP) – China’s trade surplus with the United
States widened last year, data showed Monday, while the country’s imports and
exports fell in December as the long-running trade war begins to bite in the
world’s number two economy.
The surplus with the US is a major source of anger within the Trump
administration, which imposed tariffs on hundreds of billions of dollars
worth of Chinese goods last year and has warned of more to come.
Despite the levies, exports to the United States grew 11.3 percent last
year while imports rose 0.7 percent, expanding the surplus to $323.3 billion
from $275.8 billion in 2017, customs data show.
However, in a sign that the White House’s measures are having an impact,
China’s exports to the US sank last month.
The figures come after a US delegation held three days of talks in Beijing
last week in the first face-to-face meeting since Donald Trump and Chinese
leader Xi Jinping in December pledged a 90-day truce to resolve the crisis.
Trump wants Beijing to buy more American goods to narrow the yawning trade
gap and allow foreign players better access and protection in the Chinese
market.
Traditionally China imports vast quantities of American soybeans in the
second half of the year, long making it the most valuable import from the US.
– Import growth to ‘remain subdued’ –
But the buying fell off last year after China imposed a 25 percent
retaliatory tariff on the commodity in the summer. Total imports of soybeans
fell 7.9 percent last year to 88 million tonnes, the customs data showed.
“The overall development of China-US trade in 2018 was still relatively
normal, but the trade surplus did expand slightly,” said Li Kuiwen, spokesman
for the customs administration.
“We believe this is because China and the US are in different stages of
development and it also reflects the highly complementarity nature of the
economies,” Li said.
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The country’s commerce minister told state media on Friday that China will
work to straighten out trade frictions with the US this year.
China’s exports to the world fell 4.4 percent in December from a year
earlier, while imports dropped 7.6 percent, reflecting sluggish demand at
home and abroad.
“With global growth set to cool further this year, exports will remain
weak even if China can clinch a trade deal that rows back Trump’s tariffs,”
said Julian Evans-Pritchard of Capital Economics.
“With policy easing unlikely to put a floor beneath domestic economic
activity until the second half of this year, import growth is likely to
remain subdued,” he said.
– ‘Hidden concerns’ –
China’s global trade volume rose last year but its surplus with the world
fell 16.2 percent to $351.76 billion in 2018, as imports rose 15.8 percent
while exports gained 9.9 percent.
The customs administration will work to “improve the country’s business
environment and expand foreign trade… in order to keep employment, the
financial sector, foreign trade, foreign investment” stable, Li said, adding
there are some “hidden concerns” and “uncertain external factors” for
development.
With US tariffs in place, the gloomy export picture has reinforced the
need for Beijing to rely on its legion of consumers to grow its economy.
But a slew of bad data has added to concerns about China’s economy, which
is expected to have grown around 6.5 percent in 2018, down from 6.9 percent
in 2017 and the weakest rate in almost three decades.
China’s annual passenger car sales fell last year for the first time in
more than 20 years, as the trade war with the US rocked consumer confidence
and Beijing reined in car financing channels.
The cost of producing goods in China’s factories slowed sharply in
December, a sign demand remains weak, while consumer inflation also flagged.
Official data showed the manufacturing sector contracted in December for
the first time in more than two years.
BSS/AFP/HR/1055