China’s US trade slumps again, but exports rise due to higher demand from Asian neighbours
- China’s unexpected rise in exports in July was driven by trade with the likes of Taiwan, Singapore and South Korea to offset drop in sales to the United States
- US-China trade is tipped to continue to fall, with yuan devaluation unlikely to offset tariff effects, analysts said
The first year of the US-China tariff war drove the world’s two largest economies further apart on trade, with new data suggesting that Beijing may be looking to its Asian neighbours to take up some of the slack as the mainland seeks to become less reliant on the United States.
China is also buying fewer American goods with imports from the US falling 19.1 per cent in July, marking 11 months out of the past 12 in which China’s purchases of US products fell, with existing and threatened tariffs meaning the division is unlikely to narrow any time soon.
A surprise 3.3 per cent upturn in China’s overall exports in July was sparked by higher demand from neighbouring economies, namely Taiwan, Singapore and South Korea – whose fortunes have all been extensively damaged by the trade war.
It is unlikely that anyone else can completely fill the gap left in China’s outbound sales by the exodus of American buyers as the US remains the world’s largest economy and also the world’s most vibrant consumer market. For example, in average income per person, China is nearly 40 years behind the US, according to the International Monetary Fund.