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China October export growth surprisingly strong in race to beat higher U.S. tariffs

Reuters  |  BEIJING 

(Reuters) - reported stronger-than-expected for October as shippers rushed goods to the United States, its biggest trading partner, seeking to beat higher rates due to kick in at the start of next year.

Import growth also defied forecasts for a slowdown, suggesting Beijing's efforts to cushion the cooling may be slowly starting to make themselves felt.

rose 15.6 percent last month from a year earlier, customs data showed on Thursday, picking up pace from September's 14.5 percent. The reading handily beat analysts' forecasts in a poll for a slowdown to 11 percent, though estimates had varied widely.

Growth in imports for October quickened to 21.4 percent from 14.3 percent in September, again beating analysts' forecast for a slight cooling to 14 percent.

China's trade surplus with the was $31.78 billion in October, off a record high of $34.13 billion in September.

October was the first full month after the latest U.S. tariffs went into effect.

Despite several rounds of U.S. duties this year, China's have been surprisingly resilient as firms ramp up shipments before stiffer U.S. tariffs go into effect.

Container ship freight rates from to the U.S. remain near record highs set in September, suggesting solid November shipments as well.

But analysts say the risk of a sharp and sudden export slump is growing as higher tariffs near, noting factory surveys have shown falling export orders in recent months.

U.S. orders for Chinese goods at the latest Canton fair dropped 30.3 percent from a year earlier by value, the fair's organiser said on Sunday, as higher U.S. tariffs made goods from batteries to farm tractors costlier.

TRADE SURPLUS FUELING TENSIONS

For the first 10 months of the year, China's surplus with the United States, its largest export market, totalled $258.15 billion, widening sharply from $222.98 billion in the same period last year.

and slapped additional tariffs on each other's goods on Sept. 24 and the U.S. has pledged to sharply raise the rate from 10 percent to 25 percent at the turn of the year.

also has threatened to impose duties on virtually all of the Chinese products that buys. Trump has railed against over intellectual property theft, entry barriers to U.S. business and the gaping trade gap.

In what could be a sign of a thaw in tensions, however, Trump and his Chinese counterpart spoke by phone last week ahead of an expected meeting between the two at the summit in in late November.

For trade with all countries, China's surplus was $34.01 billion for October, compared with forecasts of $35 billion and September's surplus of $31.69 billion.

With the export outlook clouded by U.S. tariffs and the Chinese expanding at the weakest pace since the global financial crisis, policymakers in have recently turned their focus to growth boosting measures, including increasing export tax rebates and pledging more support to private firms.

China is also set to cut import taxes on more goods including from Nov. 1, on top of reductions implemented earlier this year, to reduce costs for consumers and companies.

Xi said at the opening of an import expo this week that he expects China to import $30 trillion worth of goods and $10 trillion worth of services in the next 15 years. Last year, Xi estimated that China would import $24 trillion worth of goods over the coming 15 years.

(Reporting by Beijing Monitoring Desk; Editing by Kim Coghill)

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

First Published: Thu, November 08 2018. 11:44 IST
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