Robust Growth in Trade
China’s foreign trade started on a positive note in the first month of 2018, further adding to evidence of steady economic fundamentals. However, an increase in U.S. protectionism may dampen the future growth of trade.
China’s foreign trade volume rose 16.2 percent year on year in January to 2.5 trillion yuan ($400 billion), compared with a 14.2-percent rise in 2017, the General Administration of Customs said on February 8.
Exports increased by 6 percent to reach 1.3 trillion yuan ($205 billion), while imports rose 30.2 percent to 1.2 trillion yuan ($190 billion). The trade surplus shrank 59.7 percent to stand at 136 billion yuan ($21.5 billion), compared with a 14.2-percent reduction in 2017.
“Export growth remained robust in January, indicating strong economic fundamentals,” said a report from China Merchants Securities (CMS). According to the report, solid global growth also provided some support as global demand rose.
Customs data also showed that a leading indicator for Chinese exports rebounded from last December’s 41.1 to 41.6 in January, signaling positive potential in exports.
According to the CMS report, January’s import growth was driven in part by demand from factories restocking before the Spring Festival holiday from February 15 to 21. The data also revealed a more balanced economy and an upgraded economic structure.
General trade, which has a higher added value than processing trade, has increased in both volume and proportion, expanding to 1.47 trillion yuan ($232 billion) in January and accounting for 58.6 percent of total foreign trade.
Trade with countries along the Belt and Road routes rose 17.8 percent year on year, 1.6 percentage points higher than the overall trade growth.
Chinese private enterprises played a bigger role in trade for January, edging up by 0.2 percentage points to 39.5 percent in its share of total trade, compared with the figure for January 2016.
Electromechanical products remained a pillar of exports, with some high value-added products also doing well. Electronics and home appliances continued to expand in January.
Imports and exports with major trading partners remained strong. The European Union, the United States and ASEAN are China’s top three trading partners.
China’s trade volume with the United States rose 11 percent year on year in January to 352 billion yuan ($55.6 billion), accounting for 14 percent of the national total.
Exports to the United States climbed 7.5 percent, while imports from the country jumped 20.5 percent.
The trade surplus with the United States narrowed 0.2 percent year on year to 144.8 billion yuan ($22.9 billion), compared with a 13-percent rise in 2017.
Looking forward, analysts expect that highquality development and global economic recovery will continue to support China’s foreign trade in 2018, but rising U.S.-China trade friction remains a key risk.
Solid global growth may provide some support for export growth, but real effective exchange rate appreciation and an increase in U.S. protectionism could weigh on exports, narrowing the trade surplus further, according to securities trader Nomura.
“We hope economic and trade cooperation between China and the United States not only benefits both sides, but serves as a positive force for world growth,” Gao Feng, spokesman for the Ministry of Commerce, said at a recent press briefing.