China exports surge tainted by fears of trade turmoil

BEIJING, CHINA: Chinese exports surged more than forecast in January, data showed Friday, in a fresh sign of improvement in the world's number two economy as leaders prepare for possible trade stand-offs with US President Donald Trump.

The strong figures come as Beijing looks to position itself as leader of the global trade regime in anticipation of a US retreat under a protectionist Trump administration.

Officials at the Customs bureau said overseas shipments jumped 7.9 percent on-year to $182.8 billion, easily outstripping the 3.2 percent tipped in a survey of economists by Bloomberg News. It also reversed December's 6.1 percent plunge.



Last month data showed the economy, a key driver of growth around the world, expanded in 2016 at its slowest pace for more than a quarter of a century, but saw a surprise improvement during the final three months.

And last week a reading on factory activity for January indicated the manufacturing sector was stabilising.

Imports also exceeded expectations, rising 16.7 percent to $131.4 billion, compared with an expected 10 percent increase. The trade surplus climbed to $51.3 billion, beating estimates by more than $2 billion.

"Chinese trade values have been picking up in recent months thanks to a revival in global manufacturing, the continued strength of China's domestic economy and the rebound in global commodity prices," said Julian Evans-Pritchard of Capital Economics.

However, he pointed out: "It's likely that much of the pick-up last month was seasonal", noting that "all of the pre-holiday rush to import goods and meet exports orders fell in January", with the country stocking up before Chinese New Year, when all businesses close.



Mizuho Securities Asia chief Asia economist Shen Jianguang told Bloomberg News: "The strong data was related to the global pick-up in growth in the US, Europe and also emerging economies."

But the reading could be a precursor to a frictions with Washington as Trump settles into the White House, seemingly intent on following through with a series of election promises that included a review of global trade deals he says are unfair to the US.

Last week he once again accused Beijing - as well as Japan - of currency manipulation to give its exporters a trade advantage of US firms, while he has also warned of huge tariffs on Chinese goods.

The yuan is wallowing near eight-year lows against the dollar as investors, frightened by a weaker Chinese economy and the prospect of better returns in the US, withdraw their cash from the country.



Hopes for a less confrontational relationship between the two economic giants were boosted Friday by news Trump had reaffirmed to President Xi Jinping Washington's 'One China' policy.

The move, acknowledging Taiwan is not a separate country, was seen as an apparent effort to ease tensions after angering Beijing by questioning the policy that underpins Sino-US relations.

Nevertheless Shen said: "The exports outlook for China is good, except for the potential risk of a Sino-US trade war," he said.