China Says It's Implementing Deals Done With U.S. on Trade

Xinhua  Sipa USA  Newscom

Xinhua Sipa USA Newscom

"Moderating global momentum, the stronger dollar and protectionist trade policies will keep weighing on exports in the near-term, while sturdy domestic demand and limited spare capacity keep import growth healthy - further widening the deficit", Jake McRobie and Gregory Daco, economists at Oxford Economics, said in a report.

"Now with US and China agreeing not to escalate trade tensions any longer, China will start purchasing US agricultural goods, which may narrow China-US trade surplus in the future", they said.

The trade surplus with the United States was nearly US$35.6 billion, driven by a 9.8 per cent rise in exports compared with the same period previous year and a 25 per cent decline in imports.

But China's overall trade last month was worse than expected, with export growth slowing to 5.4 per cent and import growth slowing to 3 per cent.

Growth in imports for November slowed sharply to 3.0 percent from a 21.4 jump in October, and far missed analysts' forecast of 14.5 percent.

Xu Jianwei, senior China economist from French bank Natixis, said the bigger fall in imports from 21.4 per cent in October pointed to weakness in domestic demand but higher base number from November previous year also needed to be taken into account.

U.S. President Donald Trump, U.S. Secretary of State Mike Pompeo, U.S. President Donald Trump's national security adviser John Bolton and Chinese President Xi Jinping at a working dinner after the G20 leaders summit in Buenos Aires on December 1, 2018.

As part of the truce, Trump agreed to hold off on plans to raise the tariffs on $200 billion in Chinese imports to 25% beginning 1 January, leaving them at the current 10% rate. November's China numbers might add a sense of urgency.

In particular, imports of soybeans plunged by 38 per cent, while iron ore, coal and steel imports also fell.

"China talks are going very well", Trump said on Twitter, without providing any details.

The U.S. worldwide trade deficit in goods and services increased to $55.5 billion in October from $54.6 billion in September, according to Census Bureau data. The October surplus was US$31.78 billion. Many economists attributed to strength in recent months to front-loading of cargoes to the United States in anticipation of even higher tariffs.

Economists say one factor helping keep up Chinese exports this year is that the yuan has weakened more than 5 per cent against the dollar, helping to make Chinese products more competitive overseas.

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