Are these Chinese export numbers an olive branch in the countdown to a trade war with the US?

China releases some export data early, showing a fall in shipments to the United States

PUBLISHED : Tuesday, 03 July, 2018, 2:05pm
UPDATED : Tuesday, 03 July, 2018, 2:43pm

China’s customs agency broke with protocol late on Monday, releasing first-half and June export data days ahead of schedule and giving a rare breakdown for shipments to the United States.

In a brief statement, the General Administration of Customs said growth in China’s US-bound shipments slowed to 5.4 per cent in the first six months from 19.3 per cent a year earlier. June export growth was even slower at 3.8 per cent, down 23.8 percentage points from the same time in 2017, the administration said.

China’s exports of electronics and mechanical products to the US grew 8 per cent year on year in the first half, accounting for 62.6 per cent of the total shipments. Shipments of labour-intensive products were flat in the same period, while garment sales dropped 1.8 per cent.

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The administration rarely releases country-specific export data ahead of the overall monthly trade data. It is scheduled to release China’s June imports and exports figures on July 13 as well as the exact value of the country’s trade with its major trading partners, including the US.

The preliminary release of the US number came ahead of the day Beijing and Washington are expected to impose tariffs on each other’s goods.

The US is scheduled to impose a 25 per cent tariff on US$34 billion worth of Chinese products on Friday, and China has threatened to retaliate in a tit-for-tat manner.

ANZ Bank chief Greater China economist Raymond Yeung said the early release was “a sign of goodwill” from Beijing, indicating that Chinese exports to the US were losing steam.

But Yeung said it might not do much to ease trade tensions because the US complaints had “already gone beyond the trade deficit to a variety of bilateral issues” such as intellectual property theft and market access restrictions.

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US President Donald Trump has repeatedly called for a narrowing of the US trade deficit with China, which totalled US$375 billion last year, according to US statistics. Washington has demanded that the gap be cut by US$200 billion in three years but it has also taken aim at forced technology transfer and Beijing’s “Made in China 2025” industrial strategy, threatening to impose heavy tariffs on Chinese products. China has responded with its own tariff threats.

Lu Zhengwei, chief economist at Shanghai-based Industrial Bank, said China had already managed an overall balance in trade but it was hard for it to meet the US administration’s demands because Washington was conducting “continuous stress tests [with Beijing] to maximise its benefits”.

Lu said there was still a chance for a last-minute deal to postpone the tariffs because they were just a tool of the Trump administration.

“The bilateral communications channels are open,” he said.