China’s exports keep growing despite U.S. tariffs
November 13, 2018 Category Foreign trade, Weekly
China’s exports and imports both recorded unexpectedly strong growth in October, a sign that the economy remained resilient despite growing external uncertainties. Exports in yuan-denominated terms rose 20.1% year-on-year in October, up from the 17% growth in September, according to the General Administration of Customs. Imports surged 26.3% last month, also quickening from a rise of 17.4% in September. As a result, the trade surplus stood at CNY233.63 billion last month, widening from CNY213.23 billion in September. For the first 10 months of the year, China’s foreign trade totaled CNY25.05 trillion, up 11.3% from the same period last year. The trade surplus for the first 10 months narrowed 26.1% year-on-year to CNY1.65 trillion. October marked the first full month after the latest U.S. tariffs on Chinese goods came into effect. For the first 10 months, China’s foreign trade with the United States, its second-biggest trade partner, rose 7.4%. Its surplus with the United States widened 11.5% from a year earlier to CNY1.69 trillion. Trade with the European Union increased 8.4% year-on-year in the first 10 months.
Alibaba Group Holding Executive Chairman Jack Ma called the U.S.-China trade war the “most stupid thing in this world”. “Trade is to communicate, nobody can stop free trade,” he told a business forum held on the sidelines of the China International Import Expo (CIIE) in Shanghai. Ma, 54, who is working to establish an electronic world trade platform, a “digital Silk Road” that lets China trade electronically with several countries, said that the country is shifting away from an export model to an import model and that it would be the “greatest challenge for China”. “It’s going to be a huge pain to a lot of businesses, but it’s also going to be a good opportunity for a lot of consumers,” he said, adding that China can face any challenges. Ma also stated that manufacturing was no longer creating jobs in China, pointing to the rise of services that will help create employment.
The appetite among Chinese investors for U.S. property has cooled this year, although the softening could be temporary given the allure of U.S. dollar denominated assets and the appeal of real estate as a store of offshore wealth, according to analysts. Hong Kong and mainland China investments in the U.S. property market amounted to USD4.42 billion from January to October, compared to USD6.81 billion for the whole of last year, according Colliers. Property analysts cautioned that Chinese buyers had turned skittish amid growing trade frictions between China and the U.S., although the longer term impact of the trade war was hard to forecast. Chinese inquiries about U.S. property dropped 11.4% in September, steeper than the 8.2% decline in the first half, according to Chinese property website juwai.com.
President Xi Jinping met in Beijing with Dr. Henry Kissinger, 95, former U.S. Secretary of State and National Security Adviser, and called for coordinated efforts with the United States to promote the healthy development of Sino-U.S. ties. China and the U.S. should exercise proper judgment toward each other’s strategic intentions, Xi added. China and the U.S. should seek to resolve their economic disputes on the principles of “mutual respect, equality and mutual benefit”, Vice Premier Liu He, China’s top negotiator on trade, told Kissinger.
Former U.S. Treasury Secretary Henry Paulson warned a new “economic Iron Curtain” could descend between China and the United States as the divisions between the two nations broaden amid the escalating trade war. Paulson also warned against attempts to isolate China, but called on leaders in Beijing to implement bold reforms like their predecessors Deng Xiaoping and Zhu Rongji.
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