Published: Tue, June 11, 2019
Global News | By Blake Casey

China's exports beat forecast to rise as trade war heats up

China's exports beat forecast to rise as trade war heats up

Imports declined by 8.5% in May from a year earlier, according to the customs administration, more than double the forecast drop.

That left the country with a trade surplus of 279.12 billion yuan (41.65 billion USA dollars) for the month, according to customs data. The increase shifted the expectations of analysts polled by Reuters, who projected the reserves to drop by five billion to $3.090 trillion.

Trade talks between Beijing and Washington have stalled while the two countries have threatened to slap more sanctions on each other.

The evaluation feeds into a debate triggered by U.S. demands that companies in Europe and other allied nations shun Huawei as a 5G equipment supplier because of Washington's fears it could compromise intelligence services.

Beijing responded to Trump's latest tariff hike by increasing levies on $60 billion of USA products on June 1.

China is preparing to curb some technology exports to the United States, the chief editor of China's Global Times newspaper said on Saturday.

Democrats say Justice has agreed to provide key Mueller docs
He said he'll pay particular attention to the question of whether Trump obstructed justice. Besides Dean, two former USA attorneys and a legal scholar are scheduled to appear.

Trump is expected to meet Chinese President Xi Jinping at the G20 summit in Japan at the end of the month.

As per Reuters, treasury secretary Steve Mnuchin, a man who can't spell "munchkin", dropped the first leading hints that Huawei was being used as a bargaining chip in the ongoing trade war between the U.S. and China.

Although refiners in Asia are not left without choice for crude oil after the end of the US sanction waivers for Iranian oil, the higher price of alternative supplies, as well as soaring fuel exports from China, are depressing refining margins across Asia.

The fall in imports underscores the weakness of the domestic economy while the uptick in exports may well prove temporary, as it's likely driven by manufacturers front-loading shipments ahead of threatened new USA tariffs. "(China's currency) and front-loading of shipments amid fears of higher U.S. tariffs, do not change our overall cautious view on China's export look for 2019", Betty Wang, Senior China Economist at ANZ Research, said in a note. They adjusted their forecasts to a fall in exports for the third quarter, once the tariffs are in place.

The export turbulence ahead could prompt Beijing to intervene and stimulate the economy. "If China wants to move forward with the deal, we're prepared to move forward on the terms we've done", Mnuchin said. "Beijing will likely step up its stimulus measures to stabilize financial markets and growth".

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