BEIJING • China's trade surplus with the US hit a record high last month, even as overall export growth slowed amid waning global demand and uncertainty about a constructive resolution to the trade war.
The trade surplus with the United States was almost US$35.6 billion (S$48.7 billion), up from US$31.78 billion in the preceding month.
This was driven by a 9.8 per cent rise in exports from the same period last year and a 25 per cent decline in imports.
Shipments to the whole world in dollar terms rose 5.4 per cent last month, missing estimates.
Imports grew 3 per cent, widening China's trade surplus to US$44.7 billion from US$34 billion. That was the highest this year.
"The weaker-than-expected trade growth is due to a high base, lower oil prices and the fading of front-loading ahead of tariff hikes," said Mr Larry Hu, a Hong Kong-based economist at Macquarie Securities, referring to exporters shipping goods faster to get them into the US ahead of possible tariff hikes.
Mr Hu added: "Export growth will decline significantly to low single digits next year as front-loading ends."
That front-loading may still have been happening last month as the US tariff hike threatened for next Jan 1 was still on the table before presidents Donald Trump and Xi Jinping met at the Group of 20 summit.
The tariff hike, which has helped spur export growth since August, was postponed after the high-stakes meeting about a week ago, where both sides agreed to work towards a substantive agreement within 90 days.
Barclays Bank economist Angela Hsieh said: "The truce may buy time for manufacturers to lengthen the inventory cycle, but it is unlikely to boost the (capital expenditure) outlook meaningfully, unless uncertainty is eliminated completely."
Mr Xia Le, Hong Kong-based chief Asia economist at Banco Bilbao Vizcaya Argentaria, said: "Major economies, excluding the US, have all shown slowing growth momentum, dragging on overall global demand.
"Meanwhile, imports remain weak on sluggish domestic demand."
The official factory gauge and other early indicators have pointed to slowing domestic growth. Government support measures have yet to boost business sentiment and offset the effects of waning domestic and global demand.
US-China relations are expected to remain contentious as both countries are too strong to capitulate in negotiations but too interlinked to decouple, said Moody's managing director Atsi Sheth.