China’s June ex­ports still solid, de­spite slight cool­ing

Over­seas ship­ments lit­tle im­pacted by spat

Global Times US Edition - - BIZUPDATE -

China’s ex­ports growth is ex­pected to have cooled only slightly in June, pos­si­bly fur­ther boost­ing a trade sur­plus with the US in a test for Bei­jing as it tries to weather a vol­ley of US tar­iffs on its goods that many fear could ham­per its econ­omy.

The Trump ad­min­is­tra­tion on Tues­day raised the stakes in its trade dis­pute with China, say­ing it would slap 10 per­cent tar­iffs on an ex­tra $200 bil­lion worth of Chi­nese im­ports, in­clud­ing nu­mer­ous con­sumer items.

Given the fact that the most re­cent round of tit-for-tat tar­iffs went into ef­fect only on Fri­day, there has been lit­tle im­pact on China’s over­seas ship­ments to date.

“All in all, the trade im­pact of the first round of the tar­iff should have a very lim­ited im­pact on China’s ex­ports to the US, with a max­i­mum loss of $5 bil­lion,” Ali­cia Gar­cia Her­rero, chief econ­o­mist at Natixis Asia Re­search, wrote in a re­cently pub­lished note.

That view was backed by a Reuters poll of 39 econ­o­mists, who fore­cast a Chi­nese ex­ports growth of 10 per­cent year-onyear in June, cool­ing slightly from a 12.6 per­cent rise in the month be­fore.

China’s Min­istry of Com­merce said last week that it would en­cour­age ex­porters to de­velop new ex­port mar­kets and would also use funds col­lected from tar­iffs to ease the im­pact from US trade ac­tions on lo­cal com­pa­nies.

Im­ports growth was also ex­pected to re­main solid at 20.8 per­cent in June, the third straight month of 20-plus per­cent growth, al­beit slow­ing again from the 26 per­cent surge in May.

There is also likely to be con­sid­er­able fo­cus on the USChina trade balance as US Pres­i­dent Don­ald Trump ral­lies against China’s siz­able sur­plus and de­mands the world’s No.2 econ­omy takes mea­sures to cut it.

The poll showed China’s over­all trade sur­plus likely widened to $27.61 bil­lion in June from $24.92 bil­lion in May.

There was no sep­a­rate fore­cast on China’s trade sur­plus with the US, which has con­tin­ued to grow even as its to­tal sur­plus has nar­rowed over the last two years.

China ran a $375 bil­lion goods trade sur­plus with the US in 2017.

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