China logs record trade sur­plus with US

The Korea Times - - WORLD BUSINESS -

BEI­JING (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 U.S. 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 U.S. sank last month.

The fig­ures come after a U.S. 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 U.S.

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 Chi- na-U.S. 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 U.S. are in dif­fer­ent stages of de­vel­op­ment and it also re­flects the highly com­ple­men­tar­ity na­ture of the economies,” Li said.

The coun­try’s com­merce min­is­ter told state me­dia on Fri­day that China will work to straighten out trade fric­tions with the U.S. 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 U.S. 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 U.S. 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.

AP-Yon­hap

Con­tain­ers are loaded onto a cargo ship at a port in Qing­dao in east China’s Shan­dong prov­ince, Jan. 11. China’s trade growth slowed in 2018 as a tar­iff bat­tle with Wash­ing­ton heated up and global con­sumer de­mand weak­ened.

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