Chi­nese ex­porters rush to beat tar­iffs dead­line

Ship­ments ac­cel­er­ate in Oc­to­ber, jump­ing 15.6% in dol­lar terms

The Star Malaysia - StarBiz - - Foreign News -

HONG KONG: China’s ex­port growth ac­cel­er­ated in Oc­to­ber as com­pa­nies rushed to make ship­ments be­fore Pres­i­dent Don­ald Trump’s plans to in­crease tar­iff rates kick in.

Ex­ports in dol­lar terms rose 15.6% in Oc­to­ber from a year ear­lier, ex­ceed­ing economists’ es­ti­mates for 11.7%. Im­ports surged 21.4 %, top­ping fore­casts for 14.5%. The trade sur­plus widened to US$34bil.

China’s ex­ports have grown ro­bustly all year, propped up by strong global de­mand and the dif­fi­culty of quickly shift­ing sup­ply chains even as trade ten­sions with Wash­ing­ton deepen. Bloomberg’s Global Trade Tracker shows nine of 10 gauges are hold­ing up, with just Hong Kong air cargo flash­ing a red light. But the sugar hit may not last.

A record 18.3% de­cline in Ja­pan’s core ma­chine or­ders in Septem­ber pro­vided ev­i­dence that trade ten­sions and cool­ing global de­mand are al­ready tak­ing a toll on some ac­tiv­ity in the re­gion.

“Con­tin­ued strong ex­port growth in Oc­to­ber re­flected ac­cel­er­ated de­liv­er­ies of ex­port or­ders ahead of the US tar­iff hike,” said Ra­jiv Biswas, Asia-Pa­cific chief econ­o­mist at IHS Markit in Sin­ga­pore. “Ex­port mo­men­tum will likely slow sharply in early 2019.”

Pres­i­dents Don­ald Trump and Xi Jin­ping are ex­pected to meet at the up­com­ing Group of 20 sum­mit, with some in­di­ca­tion that the two sides are look­ing to re­duce ten­sions. Still, there’s no cer­tainty for busi­ness yet that Trump’s plan to hike tar­iffs on US$200bil in im­ports to 25% in Jan­uary from 10% now will be aban­doned or de­layed.

For­mer US Trea­sury Sec­re­tary Hank Paul­son warned Wed­nes­day of the risk of an “eco­nomic iron cur­tain” di­vid­ing the world if the two na­tions fail to re­solve their strate­gic dif­fer­ences.

“We do not ex­pect the side­line meet­ing of Xi and Trump dur­ing the G-20 would be posi- tive,” said Iris Pang, Greater China econ­o­mist with ING Bank NV in Hong Kong. “We just hope that the meet­ing won’t cre­ate fur­ther dam­age to the trade re­la­tion­ship.”

Ex­ports to the US grew by 13.2% to US$42.7bil in Oc­to­ber, down from a record high in the pre­vi­ous month. Im­ports from the US fell 1.8%, the sec­ond con­trac­tion in a row, leav­ing China’s trade sur­plus with Amer­ica at US$31.8bil for the month.

There’s a high cor­re­la­tion be­tween ex­ports and im­ports in China’s over­all trade, so the ro­bust ship­ments prob­a­bly had some im­pact on how much China bought from over­seas.

The healthy im­port fig­ures sug­gest the spillovers into other coun­tries from China’s slow­down re­main mod­er­ate, said Louis Kuijs, chief Asia econ­o­mist at Ox­ford Eco­nom­ics in Hong Kong.

With China’s econ­omy ex­pected to con­tinue ex­pand­ing faster than its trad­ing part­ners, im­ports are likely to con­tinue out­pac­ing ex­ports, caus­ing its cur­rent ac­count sur­plus to “vir­tu­ally dis­ap­pear” this year,” said Kuijs.

Still, sen­ti­ment among China’s man­u­fac­tur­ers about for­eign de­mand is more down­beat than the trade data is show­ing, said Ka­t­rina Ell, an econ­o­mist with Moody’s An­a­lyt­ics in Syd­ney.

Should Trump’s higher tar­iffs be im­ple­mented in Jan­uary, the “im­pact will hit China’s ex­ports with a thud,” she said.

— AFP

Trade bar­rier: The US flag flies over Chi­nese ship­ping con­tain­ers that were un­loaded at the Port of Long Beach, in Los An­ge­les County. China’s ex­ports have grown ro­bustly all year, propped up by strong global de­mand and the dif­fi­culty of quickly shift­ing sup­ply chains even as trade ten­sions with Wash­ing­ton deepen.

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