China Trade Data Holds Ground Despite Tariff War

By Glenn Dyer | More Articles by Glenn Dyer

For all the talk of the damage the US trade war would do to Chinese exports, the impact, while very noticeable, wasn’t as dramatic as many analysts had claimed.

In fact, so far as country’s contentious trade surplus, it rose sharply in 2019, up 21% from 2018 when the overall trade performance was smoother.

Exports rose 0.5% in all of 2019 (thanks to a surge in December) after falling for months. But while a solid achievement, it was still well down on the 10% growth seen in 2018 before the tit for tat tariffs war stepped up at the instigation of President Donald Trump.

Now the two countries have taken the heat out of the dispute with a preliminary deal.

Imports fell 2.8% last year as China’s economic growth cooled to near 30-year lows, after rising 15.8% in 2018. That fall in imports also followed weaker prices for many key imports during the year such as copper, coal, and oil.

China posted a trade surplus of $US46.79 billion in December, compared with market forecasts for a $US48 billion surplus and up from November’s surplus of $US37.93 billion.

The less than dramatic impact on China’s trade performance from the trade war with the US saw the trade surplus widened to $US424.39 billion in 2019 from $US350.9 in 2018.

That was, however, more due to the weakness of imports over the year than a surging toll of export receipts.

Iron ore though saw imports hit their second-highest ever figure in 2019 even as prices surged mid-year to above $US125 a tonne – the highest they have been since 2012.

Once again the timing of the Lunar New Year holiday played a major role in the December trade data. It’s on January 25 this year and not the mid to late February dates of the past couple of years, meaning exports jumped sharply as shippers pushed their products into global markets ahead of the holiday. Imports jumped for the same reason.

December China’s exports rose for the first time in five months in December and by more than forecast (3.2% rise from the market) at 7.6% from December 2018. Exports were also sharply up on the 1.3% dip in November.

Imports also beat forecasts, surging 16.3% from a year earlier, boosted in part by higher commodity prices and the timing of the New Year break. The market had forecast 9.6% growth versus 0.5% in November.

Monday saw the US Treasury Department drop its naming of China a currency manipulator – a label it applied as the yuan currency dropped in August.

And on Tuesday, China’s customs vice-minister Zou Zhiwu told a Bejing briefing that its soybean and pork imports from the US rebounded significantly in December and positive trade sentiment has boosted companies’ confidence.

China’s trade surplus with the United States for December stood at $US23.18 billion, according to Reuters, down from November’s surplus of $US24.60 billion.

For the year as a whole For the full year, reported a $US295.8 billion trade surplus with the United States, down from $US323.33 billion in 2018.

According to Reuters China’s total trade with the United States fell 14.6% in 2019, with exports down 12.5% and imports slipping 20.9%.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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