Amid intense trade tensions, China posted a record trade surplus of $34.13 billion with the United States in September.
China’s September surplus with the United States was larger than it’s overall trade surplus of $31.69 billion for the month.
U.S and China are two of the largest economies in the world and are locked in a bitter trade dispute. It started with U.S. President Donald Trump rightly taking issue with his country’s massive trade deficit against China.
China’s trade surplus with the United States was $225.79 billion for January-September. This is much higher as compared with about $196.01 billion in the same period of last year, Reuters calculations showed.
China’s dollar-denominated September exports rose 14.5 percent from a year ago, beating a forecasting of 8.9 percent growth in the same period by Reuters analyst poll. Chinese exports grew 9.8 percent from a year ago, in August.
Imports into China grew 14.3 percent from a year ago in September. However, this missed analysts’ predictions of 15 percent growth and was comparatively slower from the growth of 19.9 percent in the month of August.
Chinese data show the economy has largely held up so far despite rising trade tensions with the U.S.
Economists say that this is mostly due to exporters benefiting from increased orders before the tariffs hit and the figures would likely show stress in the months ahead.
The two biggest economies of the world had imposed the latest round of tit-for-tat tariffs against each other’s goods in September.
Julian Evans-Pritchard, a senior China economist at Capital Economics, a consultancy said that with global growth likely to cool further in the coming quarters and the US tariffs set to become more punishing, the recent resilience of exports is not likely to be sustained.
He added that, meanwhile with policy easing not likely to put a floor beneath domestic economic activity until the mid of next year, import growth is set to slow further down.
Zhang Zhiwei, Deutsche Bank’s chief economist and head of equity strategy for China said that even though the U.S. and China don’t appear to be near a resolution in their trade discussions, the impact of U.S. tariffs on Chinese total industrial production will be limited.
He also added that if Donald Trump imposes tariffs on an additional $267 billion of Chinese imports into the U.S, the Asian powerhouse’s exposure to the U.S. market would only be around two percent of its total industrial production.
Citing the example of Apple iPhones exported to Europe, Zhang said that China is focusing now to try to retain supply chains that support the rest of the world that make up 25 percent of the total industrial production.