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China-US surplus hits record, adding fuel to trade war

AFP  |  Beijing 

China's trade surplus with the ballooned to a record USD 34.1 billion in September, despite a raft of US tariffs, official data showed Friday, adding fuel to the fire of a worsening trade war.

Relations between the world's two largest economies have soured sharply this year, with US vowing on Thursday to inflict economic pain on if it does not blink.

The two countries imposed new tariffs on a massive amount of each other's goods mid-September, with the US targeting USD 200 billion in Chinese imports and firing back at USD 60 billion worth of US goods.

"China-US trade friction has caused trouble and pounded our foreign trade development," told reporters Friday.

But China's trade surplus with the US grew 10 per cent in September from a record USD 31 billion in August, according to China's customs administration. It was a 22 per cent jump from the same month last year.

China's to the US rose to USD 46.7 billion, while imports slumped to USD 12.6 billion.

China's overall trade -- what it buys and sells with all countries including the US -- logged a USD 31.7 billion surplus, as rose faster than imports.

jumped 14.5 per cent for September on-year, beating forecasts from analysts polled by News, while imports rose 14.3 per cent on-year.

While the data showed China's trade remained strong for the month, analysts forecast the trade war will start to hurt in coming months.

China's export jump for the month suggests exporters were shipping goods early to beat the latest tariffs, said ANZ's Betty Wang, citing the bounce in electrical exports, much of which faced the looming duties.

"We will watch for downside risks to China's exports" in the fourth quarter, Wang said.

Analysts say a sharp depreciation of the yuan has also helped weather the tariffs by making its exports cheaper.

"The big picture is the Chinese exports have so far held up well in the face of escalating trade tensions and cooling global growth, most likely thanks to the competitiveness boost provided by a weaker renminbi (yuan)," said Julian Evans-Pritchard, China at

"With global growth likely to cool further in the coming quarters and US tariffs set to become more punishing, the recent resilience of exports is unlikely to be sustained," he said.

Trump accused China of thinking Americans are "stupid" and boasted that his tariffs had already "had a big impact" on China's stumbling economy in a Thursday interview on

"I have a lot more to do if I want to do it. I don't want to do it but they have to come to the table," he warned.

The yuan has fallen for weeks against the US dollar, dropping nine percent in the past six months, which mitigates the rise in the price of Chinese goods caused by punitive US tariffs.

-- in comments published in this week -- warned China against engaging in competitive currency devaluations.

China has steadfastly denied that it has manipulated the yuan to cope with the tariffs. The US dollar has strengthened against a range of currencies this year as American interest rates have risen.

China's stock market has plunged this year but the trade war has also started to erode Trump's oft-touted US stock gains, with the Dow Jones Industrial Average down more than five per cent for the week.

The this week cited the trade war as it lowered its 2019 growth forecast for China, which is set to see its slowest expansion since 1990.

The IMF also lowered estimates for the and the global economy as a whole.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, October 12 2018. 13:55 IST
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