China announced Monday that its 2018 trade surplus with the United States was its largest in more than a decade, despite the tariff war initiated by President Donald Trump against Beijing.
China’s surplus with the United States increased 17% from a year ago to reach $ 323.32 billion in 2018, according to government data. It was the highest on record since 2006, according to Reuters. The United States‘ deficit with China is probably even larger than these numbers indicate, as China calculates the numbers using different methods, sometimes excluding goods that end up in the United States via other countries.
Exports to the United States grew 11.3% year-on-year in 2018, while imports from the United States to China grew only 0.7% during this period.
China said its overall trade surplus for 2018 was $ 351.76 billion. Exports increased 9.9% from 2017, while imports increased 15.8% during the period, according to official dollar-denominated data.
While the surplus with the United States may have grown, China’s overall trade surplus last year was the lowest since 2013, even though export growth was the highest since 2011, according to Reuters files.
China’s General Administration of Customs said on Monday that the biggest concern in trade this year was external uncertainty and protectionism, predicting that the country’s trade growth could slow in 2019.
Asia’s largest economy continues to grow steadily in 2019, but it faces external headwinds, customs spokesman Li Kuiwen said in a briefing, Reuters reported.
China’s economic data is being watched closely for signs of damage from the trade war between Washington and Beijing.
While official data indicated that the Chinese economy has held up for much of the past year, it now appears to be slowing. Production measures and export orders are on the decline as the country’s trade dispute with the United States, its largest trading partner, continues.
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China’s exports and imports in December fell
China’s overall exports in December fell unexpectedly 4.4% from a year earlier, the largest monthly decline in two years, customs data showed.
Imports also contracted unexpectedly in December, falling 7.6%, marking the largest drop since July 2016.
That left the country with a trade surplus of $ 57.06 billion for the month, compared to analysts’ expectations for a surplus of $ 51.53 billion, from $ 44.71 billion in November.
Analysts polled by Reuters expected December shipments from the world’s largest exporter to rise 3%, from 5.4% in November.
Import growth was expected to accelerate slightly to 5 percent, after slowing to 3 percent the previous month.
Exports fell due to slowing global growth and intensifying pressure from U.S. tariffs, while imports also fell due to cooling domestic demand, said Julian Evans-Pritchard, senior Chinese economist. at Capital Economics.
China’s trade surplus with the United States in December fell to $ 29.87 billion from $ 35.54 billion in November.
Beyond the tariff battle with the United States, the Chinese economy faces its own domestic headwinds. Even before Trump unleashed the latest escalation in trade tensions, Beijing was already trying to deal with a slowdown in its economy after decades of skyrocketing growth.
The two sides tried to negotiate a deal, with the latest round of talks between Chinese and US officials wrapping up last Wednesday.
China’s Commerce Ministry said on Thursday that the talks were thorough and laid a foundation for resolving each other’s concerns.
The overall outlook is hardly optimistic, Evans-Pritchard said.
“With global growth set to slow further this year, exports will remain weak even if China manages to strike a trade deal that brings back Trump’s tariffs,” he wrote in a note Monday.
“Until then, with policy easing that is unlikely to put a floor under domestic economic activity until the second half of this year, import growth is expected to remain subdued,” Evans-Pritchard added.
—Reuters contributed to this report.
Clarification: This article has been updated to clarify that China’s overall trade surplus for 2018 was $ 351.76 billion.