China’s 2019 Exports Edged Up as Total Trade With U.S. Declined

(Bloomberg) --

China’s total exports expanded in 2019 while trade with the U.S. dropped as the trade war hit relations between the two biggest economies.

• Exports increased 0.5% in 2019 from a year earlier, while imports declined 2.8% in dollar terms, the customs administration said Tuesday. That left the trade surplus at $421.5 billion for the year. Trade with the U.S. declined almost 11% in the year in yuan terms.
• In December, both import and export growth exceeded expectations, rebounding from a weak month previous. Exports rose 7.6% while imports surged 16.3%

Key Insights

• The European Union continued to be China’s largest trading partner, and the U.S. fell to third place behind ASEAN.
• Chinese Vice Premier Liu He is due to sign the first phase of the trade deal with the U.S. in Washington on Jan. 15. The truce has calmed fears of an escalating trade war between the world’s two largest economies, at least temporarily, at a time when investors are nervous over conflict in the Middle East and volatile oil prices.
• The government is scheduled to announce 2019 gross domestic product growth on Friday. The head of the statistics bureau gave an indication of the results over the weekend, when he said the country would reach its target of economic growth of 6% to 6.5%.
• China’s central bank trimmed a key interest rate this month, to keep domestic liquidity conditions relatively supportive amid a broader government drive to shore up the private sector, and ahead of the expected cash crunch during upcoming holidays. While pork prices continued rising, overall consumer inflation steadied in December and left room for monetary easing to cement a recent stabilization in economic growth.
• “China’s exports will improve as the global tech cycle picks up, despite the strengthening of the yuan in the last two months,” said Raymond Yeung, chief Greater China economist at Australia & New Zealand Banking Group Ltd in Hong Kong. “Nonetheless, headline trade will likely strengthen in early 2020 and the market may mis-attribute that to the trade talks. My bottom line is that the trade relationship remains vulnerable and import tariff rates remain high.”

--With assistance from Tomoko Sato.

To contact Bloomberg News staff for this story: Miao Han in Beijing at mhan22@bloomberg.net;Yinan Zhao in Beijing at yzhao300@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