China trade surplus surges despite economic weakness
China trade surplus surges despite economic weakness
The trade surplus in the world’s second-largest economy jumped 48.1 percent from the year before to a four-year high of $231.1 billion, the national customs bureau announced.
The increase was largely due to low growth in imports as a result of commodity prices declining last year. Total imports increased just 4.3 percent to $1.82 trillion, while exports rose 7.9 percent to $2.05 trillion.
And China’s total trade grew just 6.2 percent last year, well below the government target of about 10 percent.
Customs spokesman Zheng Yuesheng told reporters that “a sharply slowing world economic recovery, weak international market demand and rather big downside pressure on the domestic economy” weighed on the results.
China’s economic growth slowed for seven straight quarters to the end of September, while the broader global economy also faced weakness in 2012.
Data for the three months to the end of December are due at the weekend, while inflation figures will be released on Friday.
The European Union — China’s biggest trade partner — continued to suffer a prolonged debt crisis, and economic recovery in the United States, Beijing’s number two commercial counterpart, remained subdued.
Zheng added the negative factors hurting trade last year remain in place in 2013, though he still saw some reason for optimism, citing efforts to boost growth by China and other major economies.
“We expect trade growth in 2013 to be slightly better than 2012.”
The jump in the trade surplus — which in the past has been a source of friction with China’s commerce partners — was mostly a result of better terms of trade “due to lower commodity prices,” RBS economist Louis Kuijs said in a research note.
One bright spot was that exports and imports hit new single-month highs in December, rising 14.1 percent to $199.2 billion and six percent to $167.6 billion respectively, the figures showed.
Analysts, however, attributed the strong performance largely to one-off factors including better US data in the fourth quarter and rushed shipments by Chinese exporters at the year-end.
“Economic growth in developed economies may remain slow, so we think the challenges to China’s exports remain,” Sun Junwei, a Beijing-based economist with HSBC, told AFP.
“China’s economic recovery will depend on whether domestic demand will turn for the better.”
Analysts have expressed growing optimism that China’s economic growth accelerated in the final three months of last year, citing stronger recent data including retail sales, while manufacturing activity has also picked up.
Chinese authorities have said they are committed to rebalancing their economy more toward domestic demand factors such as consumer spending and away from exports.
Ren Xianfang and Alistair Thornton, economists with IHS Global Insight, said Chinese exporters could have another difficult year due to extended weakness abroad.
“With our projection for continued contraction in the eurozone and continued slowdown in the US economy, we believe China’s export sector will face another uphill battle this year — an even tougher one than 2012,” they said in a research note.
Total trade with Japan, the world’s third-largest economy, fell 3.9 percent to $329.45 billion in 2012, Zheng said, blaming most of the decrease on a weak Japanese economy.
But he added that a dispute between Beijing and Tokyo over small islands in the East China Sea that both claim but Japan controls “to some extent also had negative impact on the healthy development of China-Japan bilateral trade.”
Pompeo says China is engaging in ‘predatory economics 101’
- He said China’s recent claims of “openness and globalization” are “a joke.”
DETROIT: China is engaging in “predatory economics 101” and an “unprecedented level of larceny” of intellectual property, Secretary of State Mike Pompeo told a business audience Monday.
Pompeo made the remarks at the Detroit Economic Club as global markets reacted to trade tensions between the US and China. Both nations started putting trade tariffs in motion that are set to take effect July 6.
He said China’s recent claims of “openness and globalization” are “a joke.” He added that China is a “predatory economic government” that is “long overdue in being tackled,” matters that include IP theft and Chinese steel and aluminum flooding the US market.
“Everyone knows ... China is the main perpetrator,” he said. “It’s an unprecedented level of larceny.”
“Just ask yourself: Would China have allowed America to do to it what China has done to America?” he said later. “This is predatory economics 101.”
The Chinese Embassy in Washington did not immediately respond to a request for comment.
Pompeo raised the trade issue directly with China last week, when he met in Beijing with President Xi Jinping and others.
“I reminded him that’s not fair competition,” Pompeo said.
President Donald Trump has announced a 25 percent tariff on up to $50 billion in Chinese imports. China is retaliating by raising import duties on $34 billion worth of American goods, including soybeans, electric cars and whiskey. Trump also has slapped tariffs on steel and aluminum imports from Canada, Mexico and European allies.
Wall Street has viewed the escalating trade tensions with wariness, fearful they could strangle the economic growth achieved during Trump’s watch. Gary Cohn, Trump’s former top economic adviser, said last week that a “tariff battle” could result in price inflation and consumer debt — “historic ingredients for an economic slowdown.”
Pompeo on Monday described US actions as “economic diplomacy,” which, when done right, strengthens national security and international alliances, he added.
“We use American power, economic might and influence as a tool of economic policy,” he said. “We do our best to call out unfair economic behaviors as well.”