China's Exports Rebound Ahead of Holiday as Trade Talks Continue

(Bloomberg) -- Chinese export growth unexpectedly rebounded in the first month of 2019, while imports fell, with companies trying to ship goods ahead of the Lunar New Year shutdown likely boosting the result.

• Exports rose 9.1 percent in January from a year earlier to $217.6 billion, while imports fell 1.5 percent, leaving a trade surplus of $39.2 billion, the customs administration said Thursday.

Key Insights

• Negotiators from the U.S. and China have been making progress on the trade dispute, meeting last month and again this week. After January’s talks, China started to implement promises to buy more American goods by purchasing soybeans, but the two sides are still far apart on structural reforms.
• President Donald Trump is now considering pushing back the deadline to increase tariffs on $200 billion in imports from China by 60 days. If the two sides were to announce a deal, that would provide more certainty for companies.
• "The robust January number was most likely boosted by the holiday factor, rather than an improvement in economic fundamentals," said Tommy Xie, an economist at Oversea-Chinese Banking Corp. in Singapore. "The strong January number would also signal that February could be weaker than expected. Overall, the trade outlook in 2019 is facing pressure due to uncertainties in the trade talks and the global economy."
• The Lunar New Year break coming about 10 days earlier than last year probably boosted January’s shipments, as companies rushed to ship more goods ahead of the holiday shutdown of many factories and companies.

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• Trade with the U.S. declined in January despite the trade talks, with exports to the U.S. in dollar terms dropping by 2.4 percent from a year ago, and imports slumping by more than 41 percent.

To contact Bloomberg News staff for this story: Miao Han in Beijing at mhan22@bloomberg.net

To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, James Mayger

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With assistance from Bloomberg