China’s export machine powers ahead in January despite Trump threats
Improved recovery in domestic and overseas demand better than expected after fears of disruption caused by US protectionist measures
China’s imports and exports beat analysts’ expectations in January, possibly an early sign of improved demand at home and overseas, but they are still worried about the disruption that US President Trump’s promised protectionist measures could cause.
Exports of Chinese merchandise jumped 7.9 per cent in January compared with a year earlier in US dollar terms, beating the Bloomberg consensus estimate of 3.2 per cent.
“The exports were largely driven up by the strong economic recovery in the United States,” said Hong Hao, chief strategist at BOCOM International in Hong Kong, adding that previous yuan depreciation also played a role.
Exports to the US jumped 9 per cent in January compared with the same month last year, while imports from the US – the world’s biggest economy – jumped 27.3 per cent, according to customs figures.
China’s merchandise imports rose 16.7 per cent year-on-year last month as the “domestic economy has stabilised”, it said.
Louis Kuijs, chief Asia economist at Oxford Economics, remains cautious despite the “improved momentum”.
“The climate for China’s exports to the US is undeniably getting harsher this year under the Trump administration and risks of more broad damage to global trade,” he wrote in a note.
Trump has not taken tough action against China in the three weeks since his inauguration. Only a few Chinese products, such as steel and chemicals, have faced heavy anti-dumping and anti-subsidy tariffs so far, and those cases were initiated last year. Steel exports declined 23.2 per cent year on year in January to 7.4 million tonnes.
Beijing has kept a low profile since Trump’s victory in November’s US presidential election. However, it may be preparing to deal with potential barriers. Bloomberg reported the State Administration of Foreign Exchange started surveying exporters in Shanghai early this month to figure out their exposure to the US market, acceptable tariff levels and possible countermeasures.
It also wants to check if locally registered American firms have plans to reduce the size of their operations or transfer their businesses back home or to other countries, according to the report.