BEIJING: China’s overseas shipments held up despite trade tensions with the US, while import growth surged reflecting calendar effects and higher commodity prices. Exports rose 11.1% in January in dollar terms from a year earlier while imports increased 36.9%, leaving a US$20.34 billion (RM79.94 billion) trade surplus, the customs administration said yesterday. Economists said the data may be distorted by a later Lunar New Year holiday compared to last year. External demand has remained intact amid a synchronised global expansion, helping to offset the yuan’s continued surge. Still, the world’s largest exporter faces uncertainty: Trade friction between the two biggest economies has ratcheted up recently, with China probing sorghum imports from the US after the Trump administration slapped tariffs on solar panels and washers, which Beijing called a “misuse” of trade measures. After climbing to a two-year high this week, the yuan sank the most since August 2015 after release of the trade data and a Reuters report on potential loosening of curbs on outbound flows. A narrower than expected trade surplus is seen as reducing demand for the currency.
Export growth remained robust in January, indicating steady global demand momentum,” Louis Kuijs, head of Asia economics at Oxford Economics Ltd in Hong Kong, wrote in a report. “While we expect the favourable external setting to continue to support China’s exports, rising USChina trade friction remains a key risk.”The trade surplus with the US narrowed to US$21.9 billion as exports rose 12.7% and imports surged 26.5%.That followed a US Commerce Department report this week showing the trade gap in goods with the Asian power surged 8.1% last year.China imports more from the US than their shipments to the US. As the trade tension of the two biggest nations intensifies, this figure is timely,” said Raymond Yeung, chief greater China economist for Australia & New Zealand Banking Group Ltd in Hong Kong. “The Chinese side is expected to use this number to show their effort to narrow the trade gap.”Friction will likely intensify this year, but a trade war is unlikely, according to UBS Group AG economist Wang Tao in Hong Kong. “Targeted tariffs and restrictions may hurt related stocks or sectors, but the macro impact on China’s exports or gross domestic product growth will be very small as a stronger global recovery helps to drive 2018 export growth,” she wrote in a recent report.Don’t read too much into China’s surging imports and above-expectation exports,” Bloomberg economists Tom Orlik and Fielding Chen wrote in a note. “The numbers reflect distortions around Chinese New Year and in the case of imports continued gains in oil prices.”“More working days would definitely have an impact,” Gai Xinzhe, an analyst at Bank of China’s research institute, referring to the holiday shift.
“Though the yuan is getting much stronger against the dollar, its overall rates against other currencies are relatively stable, which could explain why exports data are better than expected.
