Despite the trade war with the US, Chinese exports rose unexpectedly strongly in September.
As the customs in Beijing announced, exports in US dollar calculated increased by 14.5 percent compared to the same month last year – significantly more than experts predicted. Imports continued to grow strongly by 14.3 per cent thanks to strong domestic demand.
However, China’s trade surplus with the US reached a record $ 34 billion in September, further fueling tensions between the two largest economies. The United States is the second largest trading partner of the People’s Republic after the European Union. Experts explained the unexpected strength of Chinese exports as companies may have preferred their exports to preempt US tariffs.
After special duties on Chinese imports initially worth US $ 50 billion, US President Donald Trump had only charged new taxes on Chinese imports worth US $ 200 billion at the end of September. With goods worth around $ 250 billion, about half of Chinese exports to the United States are now affected. In retaliation, China has imposed special duties on goods from the United States worth $ 110 billion.
As the effects will be felt later, Chinese customs expects slower trade growth in the fourth quarter. However, China has also lowered import tariffs to boost imports. The worldwide demand for Chinese goods still seems strong.
However, a full-blown trade war between the US and China could drag down global trade by 17.5 percent, according to World Trade Organization calculations. The International Monetary Fund (IMF) believes that China and the US itself will suffer significantly. According to the IMF, US economic output would fall by 0.9 per cent, that of China by 0.6 per cent, with the hitherto announced punitive and special tariffs on goods totaling 360 billion dollars and the announced tariffs on cars and car parts.
Regardless of the tensions, China imported 19.8 percent more goods from the US since the beginning of the year than in the same period of the previous year. China’s US exports, on the other hand, grew at a slower rate of 11.5 percent in the three quarters. Since the beginning of the year, Chinese exports have grown by 12.2 percent over the previous year, while imports increased by 20 percent.
China’s total trade surplus reached just under $ 32 billion in September – much more than forecasted, but still less than the US alone. Trump had threatened on Thursday to crack down on China even harder if he sees no accommodation. He could do “much more,” the US president said in an interview with Fox News – but he did not want it. China must come back to the negotiating table.
The talks between the two sides are currently on hold. But Trump and China’s leader and party leader Xi Jinping will meet at the summit of the leading economies (G20) on 30 November and 1 December in Buenos Aires, Argentina. Trump calls for greater market opening, an end to government subsidies, and an effective crackdown on technology theft.