BEIJING: China reported better-than-expected trade data for January as demand picked up both at home and abroad, an encouraging start to 2017 for the world’s largest trading nation even as Asia’s exporters brace for a rise in U.S. protectionism.
January exports rose 7.9 percent from a year earlier as global demand perked up, while imports expanded 16.7 percent on improved domestic appetite for coal, crude oil and iron ore, preliminary data from customs showed on Friday. That left the country with a initial trade surplus of $51.35 billion for the month, the General Administration of Customs said. Customs is due to release updated data for trade on Feb. 23.
China watchers caution that trends in January and February can be distorted by the long Lunar New Year holidays, with business slowing down weeks ahead of time and many firms scaling back operations or closing.
The holiday began in late January this year and early February last year. Analysts polled had expected January shipments to rise 3.3 percent after a dismal 2016 that saw exports slump 7.7 percent due to stubbornly weak global demand.
Imports had been forecast to rise 10.0 percent, accelerating from 3.1 percent growth in December. Analysts were expecting China’s trade surplus to have risen to $47.90 billion in January, versus December’s $40.71 billion, with growing attention on its large trade surplus with the United States as new U.S. President Donald Trump ramps up his protectionist rhetoric.
While China’s exports fell the most last year since 2009, other major Asian exporters have seen a rebound in recent months, due largely to stronger electronics shipments and higher prices for oil products such a gasoline and petrochemicals. Taiwan’s January exports rose 7 percent on-year, the fourth straight month of gains, while Korea’s gained 11.2 percent. China’s exports to the United States rose 6.2 percent in January compared to a year earlier.
The U.S. is China’s largest export market, accounting for 18.5 percent of its total exports. China’s imports from the U.S. rose 23.4 percent. China’s trade surplus with the U.S. was $21.37 billion in January, down from $21.73 billion in December 2016, according to data from China’s customs bureau. The surplus decreased $20.1 billion to $347.0 billion in 2016, the U.S. Commerce Department said Tuesday.
Chinese data showed a smaller overall surplus but the narrowing trend was similar. Still, by either measure it remained well above the sustained trade surplus of more than $20 billion that is one of three criteria used by the U.S. Treasury to designate another country as a currency manipulator.
Trump hasn’t made good yet on his campaign pledges of greater protectionist measures in the early days of his presidency, but analysts say the spectre of deteriorating U.S.-China trade and political ties is likely to weigh on confidence of exporters and investors worldwide.
The United States is close to slapping duties on imports of stainless steel from China after having issued a final determination this month that the products were being subsidised and dumped in the U.S. market at below fair value. China’s total trade surplus narrowed in 2016 to $510.7 billion.
Prolonged weakness in exports has forced China’s government to rely on higher spending and massive bank lending to boost the economy, at the risk of adding to a huge pile of debt which some analysts warn is nearing danger levels.