China calls for patience as trade surplus with US soars in Q1

Workers at a port in Qingdao, in China's Shandong province. China's trade surplus with the US in the first quarter rose 19.4 per cent year on year to $76 billion.
Workers at a port in Qingdao, in China's Shandong province. China's trade surplus with the US in the first quarter rose 19.4 per cent year on year to $76 billion.PHOTO: REUTERS

BEIJING • China's trade surplus with the United States surged by a fifth in the first three months of the year, with Beijing calling on Washington yesterday to be patient as tensions between the economic superpowers simmer.

Fears of a trade war have been rumbling since last month. US President Donald Trump has threatened a series of tariffs on hund-reds of billions of dollars of Chinese goods, sparking tit-for-tat warnings from Beijing.

The stand-off lies in the Trump administration's ire over massive levies and what it considers unfair practices by China that the President says are costing American jobs.

Chinese President Xi Jinping's vow this week to cut tariffs in some sectors, and Mr Trump's warm response, have calmed some concerns - but a vast gulf in expectations remains between the two countries.

The latest data showed that China continues to benefit from the two-way trade. Its surplus with the US rose 19.4 per cent year on year to US$58 billion (S$76 billion) in the January to March period, with exports up 14.8 per cent and imports 8.9 per cent higher.

Against the backdrop of recent tensions, Customs bureau spokesman Huang Songping repeated China's line that it is not looking for an advantage over its trading partners.

"We don't strive for a favourable balance of trade (for China). The current state of trade affairs is shaped by the market," he told a briefing in Beijing.

"We hope that the US will listen patiently to rational and pragmatic voices on the trade balance issue." He reiterated that China does not want a trade war, saying that "this trade friction is not conducive to China's interests, nor is it conducive to the interests of the US".

Mr Trump said the US may avert a trade war after a speech by Mr Xi that the US President believes indicates China is about to open its markets to more US goods.

"He is going to get rid of a lot of taxes and tariffs," Mr Trump said of Mr Xi in a meeting with Republican lawmakers from states with large agricultural industries, who are particularly concerned about the US President's proposed tariffs on Chinese goods.

The two countries may end up levying no new tariffs on each other, Mr Trump said.

Mr Xi had pledged a "new phase of opening up" on Tuesday in a keynote address to the Boao Forum for Asia in Hainan.

While the speech offered little new policy and made no mention of Mr Trump, Mr Xi affirmed or expanded on proposals to increase imports, lower foreign-ownership limits on manufacturing and expand protection to intellectual property - all issues central to the US President's trade complaints.

Mr Trump clearly regarded the remarks as conciliatory, and said again on Thursday that it was a "good speech".

"Again, we are doing really well with China. I think we are having some great discussions," he told the gathering of lawmakers in Washington, though he repeated that the US would win a trade war between the two sides.

"When you are US$500 billion down, you can't lose a trade war," he said. "We put a US$50 billion tariff on, and then we put a US$100 billion tariff on. And, you know, at a certain point, they run out of bullets."

AGENCE FRANCE-PRESSE, BLOOMBERG

SEE OPINION

A version of this article appeared in the print edition of The Straits Times on April 14, 2018, with the headline 'China calls for patience as trade surplus with US soars in Q1'. Print Edition | Subscribe