China exports surge tainted by fears of trade turmoil

BEIJING: Chinese exports surged more than forecast in January, data showed Friday, in a fresh sign of improvement in the country’s economy as leaders prepare for possible trade stand-offs with US President Donald Trump.
The strong figures come as Beijing looks to position itself as leader of the global trade regime in anticipation of a US retreat under a protectionist Trump administration.
Officials at the Customs Bureau said overseas shipments jumped 7.9 percent on-year to $182.8 billion, easily outstripping the 3.2 percent tipped in a survey of economists by Bloomberg News. It also reversed December’s 6.1 percent plunge.
Last month data showed the economy, a key driver of growth around the world, expanded in 2016 at its slowest pace for more than a quarter of a century, but saw a surprise improvement during the final three months.
And last week a reading on factory activity for January indicated the manufacturing sector was stabilizing. Imports also exceeded expectations, rising 16.7 percent to $131.4 billion, compared with an expected 10 percent increase. The trade surplus climbed to $51.3 billion, beating estimates by more than $2 billion.
“Chinese trade values have been picking up in recent months thanks to a revival in global manufacturing, the continued strength of China’s domestic economy and the rebound in global commodity prices,” said Julian Evans-Pritchard of Capital Economics.
However, he pointed out: “It is likely that much of the pick-up last month was seasonal,” noting that “all of the pre-holiday rush to import goods and meet exports orders fell in January,” with the country stocking up before Chinese New Year, when most businesses close.
“The strong data was related to the global pick-up in growth in the US, Europe and also emerging economies,” Mizuho Securities chief Asia economist Shen Jianguang told Bloomberg News.
But it can also be explained by a weakened yuan, which has made Chinese exports more affordable, Nomura analysts said.
Yet while overall exports grew, China’s steel exports fell 23.8 percent in January year-on-year, customs said — the result of Beijing’s efforts to reduce steelmaking overcapacity after continuous pressure from the EU and the US, which have accused the Asian giant of dumping.
Despite optimistic assessments of the strong trade figures, most analysts agreed that Trump’s hawkish trade policy stance toward China posed a major risk to continued Chinese export growth this year.
Last week he once again accused Beijing — as well as Japan — of currency manipulation to give its exporters a trade advantage over US firms, while he has also warned of huge tariffs on Chinese goods.
A high-ranking diplomat from an EU country told AFP that he believed a US-China trade war “would damage the Chinese economy but still be manageable” — though one accompanied by trade frictions with the EU “would be potentially disastrous for China.”
Hopes for a less confrontational relationship between the two economic giants were boosted Friday by news Trump had reaffirmed to President Xi Jinping Washington’s “One China” policy.