China to buy up to US$90bil worth of American goods

BEIJING: China will buy an additional US$60bil to US$90bil worth of American goods over the next several years, with agricultural products poised to benefit in the near term followed by energy and ultimately nonhigh-tech manufactured products, according to Morgan Stanley.

The world’s largest trading nation will likely seek a “non-disruptive approach” to reducing its record trade surplus with the US by gradually increasing the share of additional goods imported from there, Hong Kong-based economists Robin Xing and Jenny Zheng wrote in a report this week. Other economists say China will have to divert imports from other nations.

China’s imports increased by US$255bil, or 16%, to US$1.84 trillion last year, customs administration data show. Incoming shipments from the US rose by US$20bil, accounting for less than 8% of the total gain.

Boosting goods imports from the US by more than US$90bil could require Washington to relax controls on high-tech exports to China, “an option in which the US has appeared to show little interest in the current trade talks,” Xing and Zheng wrote.

The White House said in recent days China had offered to cut its trade surplus with the US by at least US$200bil, a number Beijing cast doubt on. It’s unrealistic for China to make such a boost to purchases over two years because it would distort its trading position with other nations and erode its already slipping current account surplus, Xing and Zheng said. — Bloomberg