China’s exports climb; trade surplus with US increases

In Photo: Container ship Thalassa Doxa sits docked at Terminal Burchardkai in the Port of Hamburg in Hamburg, Germany, on April 18. German Chancellor Angela Merkel and French President Emmanuel Macron will attempt a pincer movement on Donald J. Trump, with China emerging as the likely target of their joint effort to avert a trade war with the United States.

China’s overseas shipments exceeded estimates while imports surged, as the global economy continued to support demand.

Exports rose 12.9 percent in April in dollar terms, the customs administration said on Tuesday. Imports surged 21.5 percent, leaving a $28.8-billion trade surplus.

“The data show continued strong growth of domestic demand and a rebound, albeit not too vigorous, of external demand,” said Dariusz Kowalczyk, senior emerging-market strategist at Credit Agricole SA.

The swing back to a trade surplus is welcome for the yuan, he added.

The world’s largest exporter continues to benefit from robust global demand even as trade tensions with the United States persist.

The US last week asked China to cut the trade deficit and Beijing urged Washington to end its investigation of Chinese intellectual-property practices.

The talks will continue as President Xi Jinping’s top economic adviser plans to visit Washington, the White House said on Monday.

China’s Commerce Ministry said the two sides had agreed to establish a mechanism to try to resolve their dispute, though differences remained, Chinese state media
reported.

Trade surplus with US swells to $22.2B

China’s trade surplus with the US increased to $22.2 billion in April, the first time that the gap has widened since November, data compiled by Bloomberg show.

China’s trade surplus with the US totaled $80.4 billion in January to April, according to The Associated Press.

President Donald J. Trump’s threats of tariffs on some $150 billion of imports from China still loom, and duties could be imposed after a public comment period ends on May 22.

That would escalate tensions as Beijing vowed to follow suit with
levies aimed at US goods, including soybeans and aircraft, and economists say the threats are spurring businesses to accelerate trading activity to avoid potential duties.

“Data in April and May could be distorted by the anticipation that the US-China tariffs will hit in early- June, so both exports and imports could do well in these two months as businesses are making orders in advance,” said Tommy Xie, an economist at Oversea-Chinese Banking Corp. in Singapore.

“Looking at global environment, the recovery is still on track, despite the divergence of performances in different economies. That is a good thing for China’s exports.”

Washington visit

Xi’s top economic adviser plans to visit Washington for follow-up trade talks after Trump administration officials traveled to Beijing last week, according to the White House.

Trump was briefed on Tuesday morning by members of the US delegation led by Treasury Secretary Steven Mnuchin, who returned to Washington on the weekend from a two-day visit to China, White House Spokesman Sarah Huckabee Sanders told reporters on Monday. Sanders didn’t elaborate on the status of the discussions. Liu He will travel to Washington next week, she said. Liu was recently promoted to vice premier and is Xi’s top deputy on economic matters. China’s Ministry of Foreign Affairs, Ministry of Commerce and State Council Information Office didn’t immediately respond to faxed requests for confirmation.

“The president has a great relationship with President Xi and we are working on something we think will be great for everybody,” Sanders said in Washington. “China’s top economic adviser, the vice premier, will be coming here next week to continue the discussions with the president’s economic team. We will keep you posted as the discussions are ongoing.”

The two sides appear to be at loggerheads, with both making long lists of demands the other won’t meet, analysts say.

“The US has demanded too much. The upcoming visit is unlikely to yield a deal, but may make some progress,” said Wang Yong, a professor at the School of International Studies at Peking University. “Both sides have pressure as the implementation date of tariffs related to the 301 investigation draws near.”

Liu told American business leaders while visiting Washington earlier this year that he’d take steps to reform China’s economy, according to a person familiar with the situation.

Liu said at the time that he had three requests for the Trump administration: Establish a new economic dialogue, name a point person on China issues and hand over a specific list of demands, the person said.

“Last Thursday-Friday’s talk was too demanding and China probably won’t accept all the lists as given, but there are a lot of places where both countries can talk more, for example in terms of market access, IP [intellectual property] protection, trade practices and more important Made in China 2025,” Liu Li-gang, chief China economist at Citigroup Inc., said in a Bloomberg Television interview from Hong Kong. “In all these areas there’s wiggle room for both sides to have some constructive talks.”

Bloomberg News and AP

 

Image Credits: Krisztian Bocsi/Bloomberg

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