China’s exports fall ahead of crucial trade talks
China’s exports fell more than expected in April while imports rose, official data showed today ahead of high-stakes talks aimed at resolving a trade war with the US.
The world’s two leading economies face a possible make-or-break moment when top negotiators meet in Washington this week following months of fraught talks.
US President Donald Trump has upped the ante with plans to more than double tariffs on $200 billion in Chinese goods on Friday, the last day of a two-day visit by President Xi Jinping’s point man Vice Premier Liu He.
The trade war has battered shipments between the economic giants.
In April, China’s exports across the Pacific fell 13.2% from a year earlier, while imports from the US fell 25.7%, according to the data from China’s customs administration.
The politically sensitive trade surplus with the US remained large, widening to $21 billion last month from $20.5 billion in March. Last year it hit a record $323.3 billion.
Global markets have taken a beating this week as investors grow increasingly concerned that the China-US trade deal, which last week appeared all but ready to sign, could fall through.
US negotiators accused Beijing of reneging on commitments made during months of talks focusing on clamping down on theft of US technology and reducing China’s massive subsidies.
Analysts said that if Trump’s threat becomes reality, it will be a game changer for the global economy.
They added that the worst-case scenario would result in a US recession and a rapid reduction of growth in China.
Tepid global demand for China’s goods have heightened the risk for Beijing, which posted 6.4% economic growth in the first quarter, having decelerated every quarter last year.
China’s exports to the world sank 2.7% on-year last month while imports rose 4%, producing a trade surplus of $13.8 billion.
Economists polled by Bloomberg had expected a 3% rise in exports with imports projected to fall 2.1%.
Beijing has moved to jumpstart its cooling economy this year with massive tax cuts and fee reductions, and a targeted reduction in the amount of cash that small and medium-sized banks must hold in reserve announced on Monday.
But the central bank has yet to cut interest rates.
In March China’s exports unexpectedly jumped 14.2%, and analysts caution it is difficult to compare trends at the start of the year due to the Chinese New Year holiday, which fell in February.
Over the first four months of the year China’s exports rose only 0.2% on-year while imports dropped 2.5%, both down from the final quarter of last year.
Data last week showed China’s factory activity softened in April, with the new export orders sub-index rising from March, but remaining in contraction territory.
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