China's exports to the United States fell 27 per cent in September as compared to the previous year, although growth in its global exports hit a six-month high.
Customs figures released on Monday showed that China's worldwide exports were 8.3 per cent higher than a year before, at USD 328.5 billion, surpassing economists’ estimates. That was significantly better than the 4.4 per cent year-on-year increase in August.
Imports grew 7.4 per cent last month, much better than a 1.3 per cent increase by year in August, although a weaker domestic economy and a real estate sector downturn continue to weigh on demand and consumption. China's exports to the United States have fallen for six straight months. They dropped 33 per cent in August.
The outlook is hazy as a truce between Beijing and Washington unfolds and both sides hit out with new tariffs and other retaliatory measures. As exports to the United States have come under pressure from US President Donald Trump's policies aimed at trying to get manufacturers to shift factories to America, China has expanded markets for its products in other regions. Its shipments to Southeast Asia grew 15.6 per cent year-on-year in September, while exports to Latin America and Africa were up 15 per cent and 56 per cent, respectively.
“Currently, the external environment is still severe and complicated. Trade is facing increasing uncertainty and difficulties," Wang Jun, vice minister of China's customs agency, said at a press conference on Monday.
“We still need to put in more efforts to stabilise trade in the fourth quarter. China's exports “continue to show resilience given the low costs and limited choices for replacement globally despite the higher tariffs. What is more worrisome is not only tariffs but export controls. If we begin to see an escalation in export controls halting supply chains, this may have a more prolonged impact," said Gary Ng, a senior economist at Natixis.
Tensions with the US reignited on Friday after Trump threatened an additional 100 per cent tariff on Chinese goods and export controls on “critical” software. This came after China announced it would hit American ships with new port fees in response to a US plan to impose port fees on Chinese vessels docking in the country. Beijing also extended export controls on lithium-ion batteries and on exports of rare earths and related technologies.
The friction could jeopardize plans for a meeting between Trump and Chinese President Xi Jinping in late October. It also suggests a lack of progress in efforts to forge a broad trade agreement between the world's two biggest economies.
Also read: Investors to watch for US-China talks, inflation data, Q2 results
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