MNI ANALYSIS: China Q1 Trade Better Structured, More Balanced

-- Still Need to Watch For Global Trade Challenges

By Flora Guo

     BEIJING (MNI) - China's economy continued with good, stable momentum and

fast growing trade in the first quarter of 2018, the General Administration of

Customs said Friday when releasing the latest trade statistics data. 

     China saw more balanced foreign trade in the first three months in 2018.

Exports rose by 14.1% year-on-year to $372.35 billion, while imports rose by

18.9% year-on-year to $318.03 billion, with the surplus narrowing to $48.39

billion, down 21.9% from a year earlier. 

     --BROADER TRADE PARTNERSHIPS

     China is seeking a broadening of its trade partners, especially following

the Belt and Road Initiative proposal, and that is reflected in the data. Trade

with ASEAN (Association of Southeast Asian Nations), Latin America and Africa

have increased by 13.7%, 14.0% and 12.4% respectively. 

     Meantime, a better balance between products exported and imported, with key

equipment being imported and higher added value items being exported. 

     "China's good trade situation in the first quarter has benefited from both

the global economic recovery and stable domestic economic developments," Huang

Songping, spokesman with Customs commented, adding that "the moving forward of

supply-side structural reform is also another key point boosting the fast trade

growth."

     However, China still needs to be vigilant for challenges preventing smooth

running trade ahead, such as increasing trade protectionism and worsening

competition with global manufacturers, Huang warned.

     --SINO-U.S. SURPLUS EXPANDS

     China's exports to the U.S. amounted $99.92 billion, increasing by 14.8%

from a year earlier. China's imports from the U.S. rose 8.9% year-on-year to

$41.67 billion. The surplus, therefore, stood at $58.25 billion, or 19.4% rise,

the latest Customs statistics showed.

     U.S. President Donald Trump announced on Apr 3 increased tariffs on some

Chinese exported goods. In retaliation, China's government drew up a list of

American imported goods that could be subject to a 25% tariff. 

     China's 'to impose' list falls mainly on U.S. agricultural products such as

soybeans, along with mechanical products like automobiles. Chinese importers may

accelerate purchases during the 60-day wait period, which could see a surge in

related imports through April and May.

     Soybean imports rose a modest 0.2% from a year earlier to 19.57 million

tons in Q1. Automobiles imports rose 7.0% year-on-year to 280,000 units in the

first quarter, compared with 265,000 units in the same period last year.

     The U.S. is still China's largest purchasing country and friction between

the two is neither beneficial for neither. "We hope the U.S. government could

solve the problem with more communication on a mutual respect principle to put

the bilateral trade back into healthy and stable rail," Huang reiterated. 

     --OBOR PROFITABILITY

     China's trade with the Belt and Road Initiative countries rose 12.9%

year-on-year to CNY1.86 trillion ($295.24 billion) in the first quarter. Exports

rose 10.8% y/y to CNY1.03 trillion ($163.5 billion) and imports rose 15.7% y/y

to CNY829.2 billion ($131.61 billion). The overall trade value with OBOR

countries was 27.5% of the total trade value.

     Trade with merging countries also saw good momentum -- higher by 14.0% with

Latin America and by 12.4% with African countries.

--MNI Beijing Bureau; tel: +86 (10) 8532-5998; email: flora.guo@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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