China’s imports surge 26.3 pct, exports rise 20.1 pct in October

Roman Schwartz
November 12, 2018

With the export outlook clouded by United States tariffs and China's economy expanding at the weakest pace since the global financial crisis, policymakers in Beijing have recently turned their focus to growth boosting measures, including increasing export tax rebates and pledging more support to private firms.

China's imports from the USA fell 1.8 percent in October on-year, while its surplus with the U.S. expanded to $258 billion for the first 10 months of the year.

But analysts continue to warn of a drop in U.S. demand for Chinese goods early next year, with all eyes now on whether presidents Donald Trump and Xi Jinping can make any breakthroughs on trade when they meet later this month.

"The strong export growth in October was buoyed by front-loading activities by exporters", said Ms Iris Pang, Greater China economist at ING.

One reason for the surge is companies are eager to avoid even higher duties in a few months' time: The US tariffs on $200 billion of Chinese goods that kicked in on September 24 are set to rise from 10% to 25% at the end of the year.

Despite several rounds of USA duties this year, China's exports have been surprisingly resilient as firms ramped up shipments before even tougher measures went into effect.

Container ship rates from China to the US West Coast remain near record highs, suggesting shipments will remain solid well into this month and possibly early December.

Relations between the world's top two economies have soured sharply this year as US President Donald Trump slapped higher taxes on roughly half of Chinese imports and threatened to hit the other half.

The Foreign Trade Centre, which organised last month's Canton Fair, said on Monday that export orders to the USA declined 30.3 per cent from a year earlier by value.

China's overall trade surplus was $34.01 billion for October, lower than the $35 billion economists had expected. Several rounds of talks this year have appeared to yield little progress.

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The determined development that saw no U.S. seaborne exports of crude oil to China in August, has continued into September.

However, its surplus with the United States fell to US$31.78 billion in October, down from a record high of US$34.13 billion in September.

Trade surplus stood at 233.63 billion yuan (about 33.76 billion USA dollars) last month, expanding from 213.23 billion yuan in September, according to data released by the General Administration of Customs (GAC).

Exports to Asia jumped in June and July, from a 43% share of total exports since the start of 2017 to reach a 56% share.

Growth in imports for October quickened to 21.4 percent from 14.3 percent in September, again beating analysts' forecast for a slight cooling to 14 percent.

In 2017, Chinese imports accounted for 23% of total U.S. crude oil exports. The president promised to open Chinese markets wider, to cut costs for importers and to increase consumer spending power.

China was also helped in October by strong exports to big markets such as the European Union and Japan.

"More importantly, it also reflects some of Beijing's promise to buy more - as a way to help soothe the trade conflict with the United States".

Speaking at China's first imports expo in Shanghai, Xi also announced the country would buy US$10 trillion worth of foreign services in the same period.

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