China’s exports hold up despite US tariffs

New buses lined ready export at a port in Lianyungang, east China’s Jiangsu province. (AFP)
Updated 08 November 2018
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China’s exports hold up despite US tariffs

  • China’s exports to the US surged 13.2 percent in October from the same period last year
  • ‘Trade tensions will be a lingering concern for the global economy’

BEIJING: China’s exports to the US and the rest of the world grew more than expected in October, official data showed Thursday, as its traders apparently rushed shipments across the Pacific ahead of higher tariffs.
Relations between the world’s top two economies have soured sharply this year as US President Donald Trump slapped roughly half of Chinese imports with higher taxes.
Top Chinese officials are currently in Washington, with hopes that those talks could pave the way for a breakthrough on trade later this month when Trump meets Chinese President Xi Jinping at the G20 summit in Argentina.
Still, in October exporters continued to hurry goods across the Pacific, with China’s exports to the US surging 13.2 percent from the same period last year, according to the data released by China’s customs administration.
“October’s surprisingly strong export performance seems to have been partly due to a continuous front-loading effect and is unlikely to be a long-term trend,” said Betty Wang, China economist at ANZ.
China’s trade surplus with the US fell to $31.8 billion in October, from a record $34.1 billion in September.
October marked the first full month of US tariffs on $200 billion of Chinese goods — but the tax rate is set to jump from 10 percent to 25 percent come January.
Trump has repeatedly boasted the US could not lose a trade war with China, but Beijing’s retaliatory tariffs on American goods have been more damaging so far.
China’s imports from the US fell 1.8 percent in October on-year, while its surplus with the US expanded to $258 billion for the first 10 months of the year.
Analysts estimate the upcoming meeting of the two heads of state will fail to resolve the friction.
“We do not expect the sideline meeting of Xi and Trump during the G20 would be positive,” said Iris Pang of ING Bank.
“We just hope that the meeting won’t create further damage to the trade relationship,” Pang told Bloomberg News.
China’s overall trade — what it buys and sells with all countries including the US — logged a $34 billion surplus for the month.
Exports jumped 15.6 percent for October on-year, beating the 11.7 percent forecast by Bloomberg News, while imports rose 21.4 percent on-year, well above the forecast 14.5 percent.
“While shipments to the US held up well, those to other parts of the world grew even faster,” said Louis Kuijs of Oxford Economics.
“Global demand may be holding up better than feared, while a weaker Chinese yuan is also helping the country’s exporters.”
Robust imports showed China’s economy remained stable despite posting 6.5 percent GDP growth in the third quarter — its slowest pace for nine years.
Beijing could be pulling up from its campaign to tackle mounting debt which weighed heavily on growth, analysts said.
“Robust imports, especially commodities, could be an indication of a rebound in infrastructure investment and a stabilization of the property market,” said ANZ’s Wang.
Despite the resilient trade data, analysts forecast the US-China feud will hit growth in coming months.
“Trade tensions will be a lingering concern for the global economy,” Wang said.


American Airlines ‘unaware’ of some Boeing 737 MAX functions until last week

Updated 15 November 2018
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American Airlines ‘unaware’ of some Boeing 737 MAX functions until last week

  • The FAA and Boeing are evaluating the need for software or design changes to 737 MAX jets
  • ‘Safety remains our top priority and is a core value for everyone at Boeing’

WASHINGTON: American Airlines Group Inc. said on Wednesday it was “unaware” of some functions of an anti-stall system on Boeing Co’s 737 MAX until last week.
Boeing and the US Federal Aviation Administration (FAA) issued guidance on the system last week after a Lion Air jet crashed in Indonesia on Oct. 29, killing all 189 people on board.
The FAA warned airlines last week that erroneous inputs from the system’s sensors could lead the jet to automatically pitch its nose down even when autopilot is turned off, making it difficult for pilots to control.
The system was designed to prevent the jet from stalling, according to information provided by Boeing to airlines.
“We value our partnership with Boeing, but were unaware of some of the functionality of the Maneuvering Characteristics Augmentation System (MCAS) installed on the MAX 8,” an American Airlines spokesman said.
“We must ensure that our pilots are fully trained on procedures and understand key systems on the aircraft they fly.”
Indonesian investigators said on Monday the situation the crew of a doomed Lion Air jet was believed to have faced was not contained in the aircraft’s flight manual. US pilot unions were also not aware of potential risks, pilot unions said.
The FAA and Boeing are evaluating the need for software or design changes to 737 MAX jets in the wake of the Lion Air crash, the regulator said on Tuesday.
The American Airlines spokesman said his airline was continuing to work with Boeing and the FAA and would keep pilots informed of any updates.
A Boeing spokeswoman said the manufacturer could not discuss specifics of an ongoing investigation but it had provided two updates for operators around the world that re-emphasize existing procedures to deal with situations relating to MCAS.
“We are confident in the safety of the 737 MAX,” she said. “Safety remains our top priority and is a core value for everyone at Boeing.”