BCN-31, 32 China’s trade surplus with US jumps, global imports surge

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CHINA-US-TRADE

China’s trade surplus with US jumps, global imports surge

BEIJING, June 8, 2018 (BSS/AFP) – China’s trade surplus with the United
States jumped in May, official data showed Friday, worsening the imbalance at
the centre of tensions between the economic titans while Beijing’s advantage
with the rest of the world shrank.

The figures may reinforce Washington’s determination to move forward with
new tariffs on tens of billions of dollars of Chinese imports as early as
next week.

Beijing has warned those tariffs would void agreements made between the
two powers over months of trade negotiations between the world’s two largest
economies.

The record imbalances are at the heart of US President Donald Trump’s
anger at what he describes as Beijing’s unfair trade practices that are
hurting American companies and destroying jobs.

Trade is also expected to dominate upcoming G7 talks — which do not
include China — with Canada and leading European nations warning Trump they
will not back down over tariffs.

For the first five months of the year, China’s surplus with the US crossed
the $100 billion mark, hitting $104.8 billion.

Customs data showed the surplus grew 11.7 percent on-year to $24.6 billion
in May, with exports to the US rising by about 12 percent and imports up 11
percent.

With the wider world, Chinese demand has outpaced its shipment growth,
with its surplus of $24.9 billion for the month down 38.9 percent from last
year.

China’s exports grew 12.6 percent in May while imports jumped 26 percent
on-year, outpacing forecasts of 11.1 percent growth and 18.0 percent
respectively, by analysts pooled by Bloomberg News.

“The particularly strong May figures are due to uncertainties from the
trade negotiations,” said Iris Pang, an economist at ING Groep NV in Hong
Kong to Bloomberg News.

“Exports risks are mounting, so the exporters expedited importing
components for re-export.”

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– Trade tensions –

On Thursday in Washington, the US announced it had reached a deal with
Beijing to ease sanctions that brought Chinese smartphone maker ZTE to the
brink of collapse, a possible indication of progress in fraught trade talks.

The ZTE settlement came just days after Beijing reportedly offered to ramp
up purchases of American goods by $70 billion to help cut the yawning trade
imbalance with the United States — moving part-way towards meeting a major
demand of Trump.

Trump has demanded a $200 billion reduction in its trade deficit with
China over two years.

Despite the settlement, there was no sign Trump had veered from plans to
impose as much as $50 billion in tariffs on Chinese imports to punish Beijing
for its alleged theft of American technology and know-how.

Despite some positive signs for a trade deal with the US, analysts
cautioned China faced other trade hurdles.

“Chinese trade growth is still likely to edge down over the coming year as
the global economy loses momentum and headwinds to domestic demand from
slower credit growth intensify,” said Julian Evans-Pritchard, a China watcher
at Capital Economics.

BSS/AFP/HR/1215