China’s trade data for September was again better than many analysts and others had expected, with an especially strong (a record according to Reuters) export performance with the US.
In fact, the export and import figures have again underlined China’s surprisingly resilient to tariffs, possibly because companies ramped up shipments before broader and stiffer US duties went into effect.
Certainly, steel and aluminum exports have not been all that damaged by President Trump’s tariffs.
A weaker yuan which has depreciated about 6% against the dollar this year is easing the pain of the tariffs imposed on $US250 billion of exports to the US.
China itself will cut import tariffs on a wide range of goods beginning on November. 1, as part of its pledge to take steps to increase imports this year.
But economists reckon the solid gains in exports since April were brought forward by Chinese companies to beat the tariffs and the trade data should be noticeably weaker in the final three months of the year.
Betty Wang, senior China economist at ANZ in Hong Kong told Reuters a jump in exports of electrical machinery – the biggest export item from China to the US – was a sign exporters might have pushed out shipments ahead of the implementation of the latest tariffs on $200 billion in Chinese exports.
Along with electrical machinery, exports for textiles, furniture, and chips all rose faster than in the previous month, the customs data showed.
Li Kuiwen, a spokesman from the country’s customs agency, seem to confirm the looming slowdown when Reuters reported that he told reporters trade growth may slow somewhat in the fourth quarter.
September’s trade data from China’s Customs department rose 14.5% from a year earlier, much faster than the forecast rise of just on 9% and well above
August’s 9.8% rise.
Import growth slowed in September to an annual rate of 14.3% from 19.9%, but solid rises in iron ore, oil, copper were reported, while LNG and coal imports fell.
China reported a surplus of $US31.69 billion for September, compared with forecasts for $US19.4 billion and August’s surplus of $US27.89 billion.
China’s trade surplus with the United States widened to a record $US34.14 billion in September despite wider application of US tariffs.
Over the first nine months of the year, China’s surplus with its largest export market totalled $US225.79 billion, compared with about $US196.01 billion in the same period last year.
“The big picture is the Chinese exports have so far held up well in the face of escalating trade tensions and cooling global growth, most likely thanks to the competitiveness boost provided by a weaker renminbi,” said Julian Evans-Pritchard, senior China economist at Capital Economics.
President Trump will not be amused, but then he doesn’t understand trade at all, just as he fails to understand what is happening in the US economy and with interest rates.
