China’s export growth unexpectedly fell last month, the first drop since February 2017. That’s unlikely to ease trade tensions as the country’s widening surplus with the US is likely to further infuriate Donald Trump.China’s trade surplus with the United States surged 19.4 percent to $58.25 billion (€47.22 billion) between January and March, as exports gained 14.8 percent from the same period a year earlier, while imports rose only 8.9 percent.
The latest data released on Friday show that China continues to benefit disproportionately from the two-way trade between the world’s biggest economies, with Beijing calling Friday on Washington to be patient as tensions over the huge trade gap simmer.
Fears of a trade war have been rumbling since last month as US President Donald Trump has threatened a series of tariffs on hundreds of billions of dollars of Chinese goods to curb what he called massive intellectual property theft and revise bilateral trade relations he deems “unfair.”
In view of the latest figures, China’s Customs Bureau spokesman Huang Songping repeated the government’s line that it was not looking for an advantage over its trading partners. “We don’t strive for a favorable balance of trade (for China), the current state of trade affairs are shaped by the market,” he told a briefing in Beijing on Friday.
“We hope that the US will listen patiently to rational and pragmatic voices on the trade balance issue,” he said, reiterating that China didn’t want a trade war because frictions were “not conducive to China’s interests, nor is it conducive to the interests of the US.”
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China’s president, Xi Jinping, pledged this week to cut tariffs in some sectors. Trump’s warm response has calmed some concerns, but a vast gulf in expectations remains between the two nations.
Trade war looming
During Trump’s first year in office the surplus reached record highs — $375 billion by US counting, or $276 billion according to Chinese data. So far the large threats wielded by both sides have not been implemented.
But analysts said the trade threats may already be having an impact on exporters’ activity. Economists at Nomura said in a note to investors that US companies may have front-loaded shipments early this year before any measures kick in.
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As a result, China’s total aluminum exports in March rose to their highest since June, just as the United States imposed tariffs on imports of the metal and steel on March 23.
“We believe export growth will slow due to yuan appreciation and rising trade tensions. But the solid global growth outlook may provide some buffer. China’s import could be more resilient than export growth in our view as China has pledged to increase imports,” said Lisheng Wang, an economist at Nomura in Hong Kong.
China’s overall exports in March fell 2.7 percent from a year earlier, raising questions about the health of one of the global economy’s key growth drivers.
The decline surprised analysts who had expected a rise by 10 percent after a sharper-than expected spike of 44.5 percent in February.
March import growth beat expectations, though, surging 14.4 percent and suggesting China’s domestic demand may still be solid enough to cushion the blow from any trade shocks.
Moreover, trade figures for the whole of the first quarter weren’t so disquieting, showing exports growing a hearty 14.1 percent and imports 18.9 percent compared with the same quarter a year ago.
uhe/aos (Reuters, AFP, dpa)