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China export growth beats estimates despite trade war with US

China export growth beats estimates despite trade war with US

(8 August 2018 – China) Chinese exports grew at a faster pace than forecast in July even as the US launched a trade war by imposing tariffs on US$34 billion of imports from China.

The value of exports rose 12.2 percent in July year-on-year, accelerating from revised growth of 11.2 percent in the previous month according to figures from China’s General Administration of Customs. Imports jumped 27.3 percent last month, outperforming a median forecast of 16.2 percent. Those figures resulted in a trade surplus of $28.1bn, falling from a $41.5bn surplus in June. The US accounted for 19.3 percent of China’s exports in July, down from 19.7 percent in June.

Shipments from the US represented to 7.2 percent of total imports, falling 0.6 percentage points from a month prior and to the lowest level for the year to date. The US said on Tuesday it will start collecting tariffs on $16bn of Chinese imports on August 23. US trade officials released the final list of 279 products that will be subject to 25 percent tariffs, following on from the first batch of tariffs on $34bn of Chinese imports imposed in July. On Friday, Beijing threatened to impose  new tariffs on $60bn worth of imports from the US after the Trump administration proposed raising threatened tariffs on $200bn to 25 per cent from an original plan 10 per cent. With technology industries targeted in particular, the news comes as Beijing has also announced a new government body to oversee development of the country’s tech sector to be led by its premier. The State Council, China’s cabinet, announced the formation of a Leading Small Group on technology in a statement published to its website on Wednesday and dated to July 28.

“Adjusting for seasonality and price effects, we estimate that export volumes were essentially flat in July. Shipments to the US did weaken slightly, which suggests the tariffs had some impact. But this was offset by stronger exports to the rest of the world, most likely buoyed by the weaker renminbi” said Julian Evans-Pritchard, senior China economist for Capital Economics.

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