China’s trade surplus with US rises to 20-month high
Figures come ahead of talks between the two nations next week, with the huge trade imbalance a nagging source of political friction between the superpowers
China’s trade surplus with the United States has risen to an 20-month high ahead of talks in Washington next week which are likely to discuss the two nations’ huge trade imbalance.
The monthly surplus reached US$25.4 billion in June, according to Chinese customs data released on Thursday, the highest figure since October 2015.
US President Donald Trump heavily criticised his nation’s trade imbalance with China during his election campaign and accused Beijing of a series of unfair trading practices.
The issue will be one of the main topics for negotiations during the talks next week, along with US attempts to secure more access to mainland markets.
The customs figures showed that merchandise shipments to the United States rose 19.7 per cent to US$37.9 billion last month. China’s total exports rose 11.3 per cent to US$196.6 billion.
Trump has toned down his rhetoric on China’s trade practices after meeting President Xi Jinping at their summit meeting in Florida in April.
China announced a series of deals in May to open up its markets to US goods and services, including American beef, natural gas and ratings agencies.
The government is also considering more cooperation in other sectors, such as computer chips, aviation and e-commerce, according to a research report released by the Ministry of Commerce.
However, there are still signs of tension in the two countries’ trading relationship.
Trump has nominated Dennis Shea, a China hawk, as deputy trade representative. Meanwhile, the American business community is also lobbying hard for China to open up more markets to foreign firms and to remove regulations which they argue penalise overseas companies operating on the mainland.
Chinese customs bureau spokesman Huang Songping acknowledged rising “unfavourable conditions” facing the nation’s economy in the second half of the year.
“Monetarily policy in major developed economies has diverged, with the Federal Reserve on the road to gradual interest rate rises while European and Japanese central banks maintain their loose stance. The worsening of trade protectionism will also add factors of uncertainty and instability,” he told a regular press briefing on Thursday.
China Merchants Securities analyst Liu Yaxin said the trade imbalance was unlikely to change given the two countries’ economic structure and that improvements in the US economy would only drive up demand for Chinese goods.
However, China can try to build up trust with the Trump administration by increasing support for some American sectors, such as agriculture, she added.
Robin Xing, chief China economist at Morgan Stanley, said the meetings between Trump and Xi in Florida and at the G20 summit in Germany this month have already helped reduce trade frictions.
“They will be followed with more substantial deals in the [two countries’] one-year action plan, such as agricultural products, energy and financial services,” he said.