China’s trade surplus with

US hits new record at $34.1 b

China’s trade surplus with the United States ballooned to a record $34.1
billion in September, despite a raft of US tariffs, official data showed on
Friday, adding fuel to the fire of a worsening trade war.

US and China trade relations have soured sharply this year, with US
President Donald Trump vowing on Thursday to inflict economic pain on
China if it does not blink.

China’s exports to the US rose to $46.7 billion while imports slumped to

$12.6 billion, according to China’s customs administration.

The world’s top two economies imposed new tariffs on a massive amount of
each other’s goods mid-September, with the US targeting $200 billion in
Chinese imports and Beijing firing back at $60 billion worth of US goods.

“China-US trade friction has caused trouble and pounded our foreign trade
development,” customs spokesman Li Kuiwen told reporters Friday.

China’s overall trade -- what it buys and sells with all countries including the
US -- logged a $31.7 billion surplus, as exports rose faster than imports.

Exports jumped 14.5 per cent for September on-year, beating forecasts from
analysts polled by Bloomberg News, while imports rose 14.3 per cent on-
year.

While the data showed China’s trade remained strong for the month, analysts
forecast the trade war will start to hurt in coming months.

“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 (yuan),” said Julian
Evans-Pritchard, China economist at Capital Economics.

“With global growth likely to cool further in the coming quarters and US
tariffs set to become more punishing, the recent resilience of exports is
unlikely to be sustained,” he said.

Trump accused China of thinking Americans are “stupid” and boasted that
his tariffs had already “had a big impact” on China’s stumbling economy in a
Thursday interview.

“I have a lot more to do if I want to do it. I don’t want to do it but they have
to come to the table,” he warned.

The yuan has fallen for weeks against the US dollar, dropping nine per cent
in the past six months, which mitigates the rise in the price of Chinese goods
caused by punitive US tariffs.

US Treasury Secretary Steven Mnuchin, in comments published in the

Financial Times this week warned China against engaging in competitive
currency devaluations.

China has steadfastly denied that it has manipulated the yuan to cope with the
tariffs.

The US dollar has strengthened against a range of currencies this year as

American interest rates have risen.

China’s stock market has plunged this year but the trade war has also started
to erode Trump’s oft-touted US stock gains, with the Dow Jones Industrial
Average down more than five per cent for the week.

The International Monetary Fund this week cited the trade war as it lowered
its 2019 growth forecast for China, which is set to see its slowest expansion
since 1990.
The IMF also lowered estimates for the United States and the global
economy as a whole.

Published on October 12, 2018