China says exports to US rising ‘because American economy is strong and they want to buy our products’
China’s exports to the United States are still growing, thanks to a strong American economy and consumers’ preference for Chinese products, China’s ministry of commerce said on Monday.
The delivery of previously placed orders and “front-loading” by Chinese shippers also contributed to a robust performance so far this year, the ministry concluded in a report reviewing and forecasting China’s trade performance.
As such, the impact of the US trade war on China’s trade and broad economy will be “limited” with “total risks under control”, the ministry concluded in the report.
“The United States unilaterally provoked economic and trade friction, which not only affects Sino-US trade but has also brought significant uncertainties to the development of global trade and investment,” the ministry said.
China’s exports to the US rose 13.3 per cent in the first 10 months compared with a year earlier while its imports from the US increased by 8.5 per cent in the same period, according to China customs data. In October alone, Chinese exports to the US rose by 13.2 per cent while its imports from the US fell 1.8 per cent, earning Beijing a trade surplus of US$32 billion last month.
According to Beijing’s commerce ministry, strong demand for imported products in the US – the result of low unemployment, robust growth and good consumer confidence – is a fundamental factor helping China to sell to the US despite tariffs imposed by US President Donald Trump.
In addition, the industrial chains of China and the US are “closely integrated” and the two countries’ economic structures are “highly complementary”, the ministry added.
The US imposed 10 per cent tariffs on US$200 billion worth of Chinese products in late September – a rate set to rise to 25 per cent in January if Beijing does not make concessions.
The measures followed an initial round of tariffs on US$50 billion worth of products.
China has responded in a tit-for-tat manner by imposing tariffs on US imports.
While China’s export data looks solid for now, many economists said the impact of the trade war would start showing up in the first or second quarter of next year, adding to the woes of an economy that is already growing at its slowest pace in a decade.
China’s trade ministry also said that the country “faces both severe challenges and presents new development potential” next year and that the ministry would work hard to ensure a “steady” trade situation.
President Xi Jinping is set to meet Trump at the G20 leaders summit in Argentina next month in the hope of easing trade tensions.
Speaking at China’s first imports expo in Shanghai last week, Xi said China would buy more goods and services from abroad, saying the country’s purchases of foreign goods would be worth US$30 trillion over the next 15 years.
Xi also announced the country would buy US$10 trillion worth of foreign services in the same period.
Analysts expect the trade war will see China importing more from other countries as it reduces tariffs. However, China’s growth is likely to slow further in the coming months as the trade war takes its toll.
In response – amid signals that policymakers are increasingly nervous about the outlook –, the government has launched a series of measures to support the economy, including cutting individual taxes, speeding up infrastructure spending and extending additional financing options to help struggling smaller companies.