China's trade surplus with US widens as exports surge

BEIJING • China's exports rebounded more strongly than expected last month after a surprise drop the previous month, suggesting global demand remains relatively resilient and providing a cushion to the economy amid a heated trade dispute with the United States.

Imports last month also grew more robustly than expected, suggesting China's domestic demand is holding up well, good news for policymakers looking to soften the blow from any trade shocks.

The headline readings came as the world's two largest economies have threatened each other with tens of billions of dollars' worth of tariffs in recent months, leading to worries that Washington and Beijing may engage in a full-scale trade war that could damage global growth and roil financial markets.

China's April exports rose 12.9 per cent from a year earlier, beating analysts' forecasts for a 6.3 per cent increase and snapping back from a 2.7 per cent drop in March, which economists believe was heavily distorted by seasonal factors.

The heated row with Washington and threats of tit-for-tat punitive measures on trade and investment have added to existing concerns about an economic slowdown in China this year.

High-level discussions between the two sides in Beijing last week appeared to make little substantive progress in defusing tensions apart from an agreement to hold more talks. China's top economic official will visit Washington next week to resume trade talks with the Trump administration, the White House said on Monday.

A Reuters report citing sources said China had offered to buy more US goods and lower tariffs on some goods, including cars.

The Trump administration has drawn a hard line, demanding a US$200 billion (S$268 billion) cut in the Chinese trade surplus with the US, sharply lower tariffs and advanced technology subsidies.

China's trade surplus with the US widened to US$22.19 billion last month, from US$15.43 billion in March, according to Reuters calculations based on Customs data released yesterday. For January-April, it rose to US$80.4 billion, compared with about US$71 billion in the same period last year.

China's exports to the US rose 13.9 per cent in the first four months of 2018 from a year earlier, compared with a 14.8 per cent rise in January-March. Its imports from the US rose 11.6 per cent in the same period.

China's April imports also showed strong growth overall, suggesting its domestic demand remains resilient despite rising corporate borrowing costs and cooling property investment.

Imports grew 21.5 per cent on-year, beating analysts' forecast of 16 per cent growth, and accelerating from a 14.4 per cent rise in March. China's imports of soya beans and crude oil rose in April from the previous month, though imports of iron ore and coal fell.

That left China with a trade surplus of US$28.78 billion for the month, compared with forecasts for a US$24.7 billion surplus in April and a rare deficit of US$4.98 billion in March.

REUTERS

A version of this article appeared in the print edition of The Straits Times on May 09, 2018, with the headline 'China's trade surplus with US widens as exports surge'. Print Edition | Subscribe