China’s upbeat trade performance proves US taking wrong approach

China’s trade data for July came as a surprise for those that were predicting a continual weakening of the country’s exports following the escalation of the China-US trade dispute. According to the General Administration of Customs, China’s yuan-denominated exports rose 10.3 percent year-on-year in July, up from 6 percent in June. Import growth was 0.4 percent year-on year in July, up from a negative 0.4 percent the previous month.

This resulted in a trade surplus of 310.26 billion yuan ($45.06 billion).

The official data show that the country’s trade sector remains highly resilient despite the ongoing trade frictions with the United States.

More than a year after Washington dragged China into a trade stand-off, it has become increasingly clear that the US government will adopt every measure it can to force China to submit to its unreasonable terms.

Yet China’s trade performance has shown that the impact, at least so far, remains limited.

China’s robust performance is not only because Chinese exporters have made great efforts to search for new trade destinations beyond the US (for example, countries and

regions involved in the Belt and Road Initiative) and because the Chinese customs administration has simplified export and import procedures to facilitate trade. It is also the result of the high-quality manufacturing and comprehensive manufacturing supply chain that China can boast of, which means that it remains an irreplaceable source of imports for many countries.

The US approach to bringing down its trade deficit with China is misguided. The data show that over the period from January to July the bilateral trade volume was down 8.1 percent. and that China had a trade surplus of 1.15 trillion yuan ($163.3 billion) with the US.

Never one to admit it is the one in the wrong, the US has sought to increase the pressure it is putting on China in recent days by threatening to impose 10 percent tariffs on the remaining $300 billion of Chinese imports, starting on Sept 1, and falsely labeling China a currency manipulator on Monday.

It seems that like Wily E. Coyote it is going to keep going until it realizes its run off a cliff.

Instead of focusing on China, Washington would be better advised to look at and address the structural problems in the US economy.