Published: Thu, January 17, 2019
Markets | By Otis Pena

China Surplus With US At A Record High

China Surplus With US At A Record High

China's trade surplus with the United States hit a record high a year ago but the country's imports and exports fell in December as the long-running trade war begins to bite in the world's number two economy, data showed today.

New trade numbers from China show the country is feeling the effects of the US-China trade war that started in April previous year. "They're having a hard time with their economy because of the tariffs", Trump told reporters at the White House.

President Donald Trump has previously said that trade with China is unfair.

Analysts say the trade figures could be used by Washington to pressure China.

Exports to the United States surged 11.3 percent year-on-year in 2018 to $478.4 billion, while imports from the USA to China rose a scanty 0.7 percent over the same period.

According to China's customs administration, exports fell by 4.4 percent in December, while imports were at the lowest since 2016, the agency announced on Monday.

China's foreign trade rose 9.7 percent year-on-year to a historic high of 30.51 trillion yuan (about 4.5 trillion US dollars) in 2018.

Russia-China trade turnover has grown significantly over recent years. In December, exports and imports unexpectedly fell 4.4 percent and 7.6 percent respectively from a year earlier.

A slowdown in global demand and a trade dispute with the USA are being blamed for the current predicament China finds itself in.

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Chinese leaders are trying to reduce reliance on trade and nurture self-sustaining economic growth based on domestic consumer spending.

"A trade recession is likely, in our view", Raymond Yeung, chief economist at ANZ, said in a note, predicting a period of export contraction similar to 2015-16.

Economic data from China are being closely watched for signs of damage inflicted by the trade war between Washington and Beijing.

"Our country's export and import have reached record highs, and there is reason to hope that we will continue to remain the world's largest trading nation".

China's General Administration of Customs said on Monday that the biggest worry in trade this year is external uncertainty and protectionism, forecasting the country's trade growth may slow in 2019.

However, Beijing's export data had been surprisingly resilient to tariffs for much of 2018, possibly because companies ramped up shipments before broader and stiffer U.S. duties went into effect.

But a slew of bad data has added to concerns about China's economy, which is expected to have grown around 6.5 per cent in 2018, down from 6.9 per cent in 2017 and at its weakest rate in nearly three decades.

The December data overshadowed China's overseas trade registering a historic high of United States dollars 4.5 trillion a year ago.

Pang noted Chinese imports of more advanced technology for use in manufacturing smartphones and other higher-technology products declined 14.9 percent in December, almost double the size of the contraction in overall trade.

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