China's Sept trade surplus with US hits record $47b

A port in Zhangjiagang in China's Jiangsu province. The International Monetary Fund slashed China's growth forecast for next year to 6.2 per cent from 6.4 per cent.
A port in Zhangjiagang in China's Jiangsu province. The International Monetary Fund slashed China's growth forecast for next year to 6.2 per cent from 6.4 per cent.PHOTO: AGENCE FRANCE-PRESSE

Exports up 14.5% from a year ago, weaker yuan possibly softened tariffs' blow

BEIJING • China reported yesterday an unexpected acceleration in export growth last month and a record trade surplus with the United States, which could exacerbate an already heated dispute between Beijing and Washington.

September exports rose 14.5 per cent from a year earlier, Chinese customs data showed.

That blew past forecasts for an 8.9 per cent increase in a Reuters poll and was well above August's 9.8 per cent gain.

Growth in imports for last month instead showed a moderate slowdown to 14.3 per cent from 19.9 per cent in August, slightly missing analysts' forecast of a 15 per cent growth.

China's trade surplus with the US widened to a record last month despite wider application of US tariffs, an outcome that could push President Donald Trump to turn up the heat on Beijing in their trade dispute.

The politically sensitive surplus was US$34.13 billion (S$47 billion) last month, surpassing the record of US$31.05 billion in August.

China's export data has been surprisingly resilient to tariffs, possibly because companies ramped up shipments before broader and stiffer US duties went into effect. A weaker yuan, which has depreciated about 6 per cent against the dollar this year, may have taken the sting out of the tariffs imposed on US$250 billion of exports to the US.

China's export data has been surprisingly resilient to tariffs, possibly because companies ramped up shipments before broader and stiffer US duties went into effect.

A weaker yuan, which has depreciated about 6 per cent against the dollar this year, may have taken the sting out of the tariffs imposed on US$250 billion of exports to the US.

Over the first nine months of the year, China's surplus with its largest export market totalled US$225.79 billion, compared with about US$196.01 billion in the same period last year.

For trade with all countries, China logged a surplus of US$31.69 billion for September, compared with forecasts in a Reuters poll for US$19.4 billion and August's surplus of US$27.89 billion.

China's economy is feeling the heat from a tit-for-tat tariff dispute and showing signs of slowing that prompted the central bank on Sunday to loosen policy by cutting banks' reserve requirement ratio for a fourth time this year.

A US Treasury official this week voiced concerns about China's recent currency depreciation.

With China's manufacturing sector cooling and export orders shrinking, Beijing has pledged to increase export tax rebates from Nov 1 for the second time this year and promised to cut corporate burden on a larger scale to help struggling Chinese firms.

The International Monetary Fund on Tuesday cut its global economic growth forecasts for this year and next, saying that the US-China trade war was taking a toll.

It also slashed China's growth forecast for next year to 6.2 per cent from 6.4 per cent.

China will cut import tariffs on a wide range of goods beginning on Nov 1, as part of Beijing's pledge to take steps to increase imports this year amid rising tension.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 13, 2018, with the headline 'China's Sept trade surplus with US hits record $47b'. Print Edition | Subscribe