February 25, 2021

Chinese trade resists in the first half

China's international trade advanced 3.9% year-on-year in the first half of 2019, which represents a slowdown of 4 percentage points compared to the same period of the previous year, according to official data published today.

The General Administration of Customs indicated that in these six months the foreign trade of China was 14.67 trillion yuan (2.13 trillion dollars, 1.89 trillion euros), and that exports grew by 6.1% , while imports did 1.4%.

Sales abroad stood at 7.95 trillion yuan (1.16 trillion dollars, 1.03 trillion euros) and purchases, at 6.72 trillion yuan (976.298 billion dollars, 866.669 million euros) .

Thus, the trade surplus was 1.24 trillion yuan (179.773 million dollars, 159.579 million euros), which represents an increase of 41.6% compared to the figure of the previous year.

In the words of the spokesman of Customs, Li Kuiwen, China registered a "sustained progress" during the first semester, in which "it achieved a development of quality".

"Despite the challenges of a complex global environment, China's foreign trade is still marked by lasting improvements, with the commercial structure continually improving and its engines changing faster," the spokesman added.

Many of the challenges that Li refers to derive from the trade war that China has with the United States since March 2018: exchanges with that country were reduced by 9% during the first half of the year, a trend mainly marked by the decline of the 25.7% in the flow of goods from the North American nation.

Exports to the United States reached 1.35 trillion yuan (196,277 million dollars, 174,258 million euros), while imports stood at 399.38 billion yuan (58,153 million dollars, 51,629 million euros) during the first six months of 2019.

This means that the trade surplus of China against its commercial rival accumulates 954,810 million yuan (138,820 million dollars, 123,247 million euros) so far this year, that is, 11.4% higher than that registered between January and June 2018.

This information will probably not sit well in Washington, since it is one of the main complaints that the US president, Donald Trump, has transferred to his Chinese counterpart, Xi Jinping, in the meetings that both have held since the arrival of the first to the White House.

The United States is China's third largest trading partner after two groups of countries: the European Union, with which it exchanged 11.2% more in the first half, and the Association of Southeast Asian Nations (ASEAN), which registered a advance in the commercial flow of 10.5%.

These two combined areas – which contain a total of 38 countries – already account for 29.2% of China's foreign trade, while the United States accounts for 11.9%.

In the opinion of Julian Evans-Pritchard, an analyst at the consultancy Capital Economics, the Chinese trade slowed its progress because "the winds against are intensified."

"Exports slowed last month due to the increase in US tariffs in May and the waning global demand," said the expert.

In fact, the analyst warns that these bow winds are likely to increase in the coming quarters, as global economic growth has not yet bottomed out and will not, according to their analysis, until next year.

"And, while the truce agreed between Trump and Xi in the G20 last month ends the immediate threat of more US tariffs, our hypothesis is that trade negotiations will break sooner or later," predicts Evans-Pritchard.

And that is in relation to exports. Imports, in his opinion, will continue to fall during the remainder of the year due to a greater slowdown in domestic demand.

In June, the foreign trade of the Asian giant fell by 1.2% with respect to that registered in May, although in the year-on-year comparison there was an increase of 3.2%.

When comparing the data with those of June 2018, it is noteworthy that exports advance by 6.1% while imports decrease by 0.4%.

(tagsToTranslate) Slowed (t) advancing (t) trade (t) resists (t) semester

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