Beijing (AFP) – China’s trade grew faster than expected last month, official data showed Monday, though fresh fears are rising of a major escalation in the tariff war between Beijing and Washington. The world’s second-largest economy has in recent years been mired in a persistent domestic spending slump just as pressure on its export-reliant manufacturing sector intensifies.
Clouding the outlook, concerns spiked over the weekend that the trade war between the world’s top two economies will worsen after US President Donald Trump announced additional 100 percent tariffs on all Chinese goods. The move, he said, was in response to Beijing’s announcement last week of sweeping new export controls in the strategic field of rare earths — currently dominated by China.
Exports jumped 8.3 percent year on year in September, the General Administration of Customs said, beating a Bloomberg forecast of 6.6 percent. The expansion was the largest since March and much faster than the 4.4 percent increase recorded in August. Imports rose 7.4 percent, the data showed, significantly outpacing a Bloomberg forecast of 1.9 percent. Shipments to the United States — the world’s largest consumer market — picked up to reach $34.3 billion, the data showed. The figure marked an 8.6 percent rise from the $31.6 billion recorded in August.
“While this resilience underscores the ability of Chinese exporters to cope with US tariffs, the latest re-escalation in tensions with the US still poses some downside risks,” wrote Zichun Huang, China Economist at Capital Economics. “Direct shipments to the US now make up just 10 percent of China’s total exports and a sizeable portion of these US-bound goods could be diverted to other countries,” wrote Huang.
Trump’s announcement Friday rattled markets and called into question a potential upcoming meeting with Chinese counterpart Xi Jinping in South Korea. His statement also said the United States would impose export controls “on any and all critical software” from November 1. Beijing, in turn, accused Washington of acting unfairly, with its Ministry of Commerce on Sunday calling the threat a “typical example of ‘double standards'”.
By Sunday the mercurial US president’s rhetoric had cooled. “Don’t worry about China, it will all be fine!” he wrote in a social media post, apparently referring to the recent export controls as a “just…a bad moment” for counterpart Xi. “The U.S.A. wants to help China, not hurt it!!!” he wrote.
Chinese goods currently face US tariffs of 30 percent under levies that Trump imposed while accusing Beijing of aiding in the fentanyl trade as well as unfair trade practices. China’s retaliatory tariffs are currently at 10 percent.
© 2024 AFP
