Wednesday, 20 February, 2019

China's import roars back to life in January; exports also beat forecasts

WIN MCNAMEE China's import roars back to life in January; exports also beat forecasts
Melinda Barton | 08 February, 2018, 14:23

China has so far held off from retaliating by adding new tariffs on U.S. imports, but Beijing has indicated it may not show such restraint for much longer.

BEIJING, Feb 8 (Reuters) - China's unwrought copper imports fell for a second straight month in January as winter restrictions on the construction sector and high domestic production rates continued to crimp demand for metal from overseas.

That left the country with a trade surplus of $20.34 billion for the month, the lowest since a rare deficit in February a year ago. The economist said export growth will rise further in February but expects import growth to drop back sharply as the seasonal base effects reverse.

January gas imports, including pipeline imports and tanker shipments of liquefied natural gas (LNG), came in at 7.7 million tonnes, one-third higher than a year earlier and just shy of the previous record of 7.9 million tonnes set in December.

"Instead of importing scrap, China has turned to unwrought copper for downstream, so that may explain the relatively high number compared to past year", Lau said.

China's trade performance rebounded in 2017 thanks to strong demand at home and overseas. The unexpected strength was also one of the key drivers behind the economy's forecast-beating 6.9% expansion a year ago.

The trade surplus had been tipped at $54.1 billion last month from December's $54.69 billion. Trade friction between the two biggest economies has ratcheted up recently, with China probing sorghum imports from the US after the Trump administration slapped tariffs on solar panels and washers, which Beijing called a "misuse" of trade measures.

The US imposed new tariffs on Chinese-made solar panels and washing machines this year after hitting aluminium foil and plywood last year.

"We hope economic and trade cooperation between China and the United States not only benefits both sides, but serves as a positive force for world growth", Gao Feng, spokesman of the Ministry of Commerce, told a recent press briefing. "We expect the USA administration to scale up on measures impeding imports from China".

Chinese authorities have accused Trump of threatening the global trade regulation system by taking action under US law instead of through the World Trade Organization.

Friction was likely to intensify this year, but a trade war was unlikely, according to UBS Group AG economists led by Wang Tao in Hong Kong.

Higher commodity prices, especially imported oil prices which rose 13.8 percent y/y also account for the rise in commodity imports.