China under pressure to strike US trade deal after exports fall

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China under pressure to strike US trade deal after exports fall


US President Donald Trump
US President Donald Trump

China’s exports slumped in December as a rush of orders to beat expected tariffs showed signs of fading and as domestic buyers succumbed to a worsening economic outlook.

The worse than expected figures, with exports falling 4.4pc in December from a year earlier, set a grim domestic backdrop for China’s negotiators as they seek a deal to end the stand-off with the Trump administration.

The fall in exports was the worst result since 2016 in dollar terms while imports slumped 7.6pc, also the worst reading since 2016 and hinting at softening demand at home.

The numbers show how the world’s biggest trading nation is being hit by a confluence of slowing global growth and by uncertainty linked to the trade war – factors that are expected to linger in the near term, at least.

“The bad trade data will quite likely increase the pressure on China to achieve a deal, or at least a suspension of the US tariff hikes,” said Louis Kuijs, chief Asia economist at Oxford Economics in Hong Kong. “At the same time, the US side also seems to be under more pressure to de-escalate tension in terms of news on the economy and financial markets than a few months ago.”

Zhou Hao, an economist with Commerzbank in Singapore who forecast a December contraction in exports, said: “There is a clear downward trend. This is not just due to the trade war and tariffs. On top of those, the major drag is slowing global demand.”

As the world’s largest exporter, Chinese factory output, profits and employment still hinge on demand from overseas.

Bloomberg

Read more: Trade tension: EU’s large surpluses make it vulnerable if Trump does a deal with China

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Irish Independent

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