China October export growth surprisingly strong in race to beat higher US tariffs
BEIJING (Reuters) – China reported stronger-than-expected exports for October as shippers rushed goods to the United States, its biggest trading partner, seeking to beat higher tariff rates due to kick in at the start of next year.
Import growth also defied forecasts for a slowdown, suggesting Beijing’s efforts to cushion the cooling economy may be slowly starting to make themselves felt.
Exports rose 15.6 percent last month from a year earlier, customs data showed on Thursday, picking up pace from September’s 14.5 percent. The reading handily beat analysts’ forecasts in a Reuters poll for a slowdown to 11 percent, though estimates had varied widely.
Growth in imports for October quickened to 21.4 percent from 14.3 percent in September, again beating analysts’ forecast for a slight cooling to 14 percent.
China’s trade surplus with the United States was $31.78 billion in October, off a record high of $34.13 billion in September.
October was the first full month after the latest U.S. tariffs went into effect.
Despite several rounds of U.S. duties this year, China’s exports have been surprisingly resilient as firms ramp up shipments before stiffer U.S. tariffs go into effect.
Container ship freight rates from China to the U.S. West Coast remain near record highs set in September, suggesting solid November shipments as well.
But analysts say the risk of a sharp and sudden export slump is growing as higher tariffs near, noting factory surveys have shown falling export orders in recent months.
U.S. orders for Chinese goods at the latest Canton fair dropped 30.3 percent from a year earlier by value, the fair’s organizer said on Sunday, as higher U.S. tariffs made goods from batteries to farm tractors costlier.
TRADE SURPLUS FUELING TENSIONS
For the first 10 months of the year, China’s surplus with the United States, its largest export market, totaled $258.15 billion, widening sharply from $222.98 billion in the same period last year.
Washington and Beijing slapped additional tariffs on each other’s goods on Sept. 24 and the U.S. has pledged to sharply raise the rate from 10 percent to 25 percent at the turn of the year.
President Donald Trump also has threatened to impose duties on virtually all of the Chinese products that America buys. Trump has railed against China over intellectual property theft, entry barriers to U.S. business and the gaping trade gap.
In what could be a sign of a thaw in tensions, however, Trump and his Chinese counterpart Xi Jinping spoke by phone last week ahead of an expected meeting between the two at the G20 summit in Argentina in late November.
For trade with all countries, China’s surplus was $34.01 billion for October, compared with forecasts of $35 billion and September’s surplus of $31.69 billion.
With the export outlook clouded by U.S. tariffs and the Chinese economy expanding at the weakest pace since the global financial crisis, policymakers in Beijing have recently turned their focus to growth boosting measures, including increasing export tax rebates and pledging more support to private firms.
China is also set to cut import taxes on more goods including machinery from Nov. 1, on top of reductions implemented earlier this year, to reduce costs for consumers and companies.
President Xi said at the opening of an import expo this week that he expects China to import $30 trillion worth of goods and $10 trillion worth of services in the next 15 years. Last year, Xi estimated that China would import $24 trillion worth of goods over the coming 15 years.