WHAT TRADE WAR? CHINESE EXPORTS ARE INCREASING … FOR NOW

Chinese export
Chinese exports increased almost 15% in September compared to the same month the previous year, according to government data released on Friday. (iStock by Getty Images)

The growth suggests that China is avoiding the first waves of tariffs that the Trump government imposed on 50,000 million dollars of its exports this summer.

China’s mass export machine is shrugging its shoulders in the face of the trade war, but there are doubts about how much longer it can be maintained.

Chinese exports increased nearly 15% in September compared to the same month the previous year, according to government data released this Friday. That exceeded the forecasts of the analysts and was stronger than the previous month.

The acceleration suggests that China is avoiding the first waves of new tariffs that the Trump government imposed on the 50 billion dollars of Chinese exports this summer.

“The big picture is that Chinese exports so far have held up well in the face of escalating trade tensions,” Julian Evans-Pritchard, a Chinese economist at research firm Capital Economics, said in a note to clients on Friday.

Chinese exports are benefiting from the fall in the value of the country’s currency. The yuan has plummeted around 9% against the US dollar over the past six months, as investors have become more concerned about the health of the Chinese economy. A weaker currency makes Chinese products more competitive compared to those of rival exporters.

That may have helped China’s trade surplus with the United States to jump to a monthly record of 34 billion in September. The large surplus is one of the main demands of President Donald Trump in the commercial dispute.

Chinese exporters may also have rushed orders in September before a new wave of US tariffs was launched by the end of the month, said Louis Kuijs, head of Asia’s economy at research firm Oxford Economics.

The United States imposed new tariffs of 10% on another 200,000 million dollars of Chinese products on September 24.

Difficult months ahead

These new measures will make it difficult for Chinese exporters to maintain the solid performance of September.

“Given that global growth is likely to cool further in the coming quarters and that US tariffs become tougher, it is unlikely that recent export resistance will be sustained,” said Evans-Pritchard.

Chinese officials also acknowledge that the most difficult months are the head.

Export growth may slow in the last three months of the year, Li Kuiwen, spokesman for China’s customs agency, told a news conference on Friday.

“There are many uncertain and unstable factors in the international environment, and the trade friction between China and the United States is constantly increasing,” he said.

The administration of Trump plans to increase its tariffs on the 200,000 million dollars to Chinese products from 10% to 25% at the end of the year. And Trump has said he is prepared to expand tariffs to effectively cover all Chinese exports to the United States, which exceeded $ 500 billion last year.

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