China to 'immediately' apply measures agreed in trade truce with US

Lloyd Doyle
December 8, 2018

While exports to the USA have held up so far this autumn, the row has sapped confidence.

"Moderating global momentum, the stronger dollar and protectionist trade policies will keep weighing on exports in the near-term, while sturdy domestic demand and limited spare capacity keep import growth healthy - further widening the deficit", Jake McRobie and Gregory Daco, economists at Oxford Economics, said in a report.

To the European Union, shipments increased 6 per cent, compared with 14.6 per cent in October. Exports to South Korea fell from a year earlier, while in October they rose 7.7 per cent.

"The sluggishness in imports and exports is in full swing", said Wang Jun, chief economist of Zhongyuan Bank in Beijing.

But Trump again sought to paint the talks in a more positive light, highlighting a report from Bloomberg that "Chinese officials have begun preparing to restart imports of U.S. Soybeans & Liquified Natural Gas" that were put on hold as a result of the president's initial tariffs.

That front-loading may still have been happening in November as the United States tariff hike threatened for Jan 1, 2019 was still on the table before presidents Donald Trump and Xi Jinping met during the Group of 20 summit. November's China numbers might add a sense of urgency.

"China talks are going very well!" A 10 percent tariff on $200 billion in Chinese goods took effect in September.

China and the USA have reached agreement in the sectors of agriculture, autos, and energy, and China will immediately start implementing that consensus, a government spokesman said.

China's November trade surplus with the United States was a record US$35.55 billion. Despite those new tariffs, the trade gap with China also widened in October, increasing by $700 million to $38.2 billion. "Export growth will decline significantly to low single-digits next year as front-loading ends".

For trade with all countries, China's surplus was $44.74 billion for November, compared with forecasts of $34 billion and October's surplus of $34.02 billion.

The trade surplus with the USA was nearly US$35.6 billion, driven by a 9.8 per cent rise in exports compared with the same period a year ago and a 25 per cent decline in imports.

Also, the Chinese yuan has weakened more than 5 percent against the dollar so far this year, helping to make Chinese products more competitive overseas. "Typically there is a six-month lag between the value of industrial export orders and currency movements".

Other reports by Iphone Fresh

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