International Business: China's exports shrink as US shipments slump

China Must Stimulate as its Economy Sharply Weakens

China's exports fell in August by one per cent year-on-year amid a protracted trade war with the United States, official data showed on Sunday.

That's despite analyst expectations that a falling yuan would offset some cost pressure and looming tariffs may have prompted some Chinese exporters to bring forward or "front-load" USA -bound shipments into August, a trend seen earlier in the trade dispute.

August exports fell 1% from a year earlier, the biggest fall since June, when it fell 1.3%, customs data showed Sunday.

Among its major trade partners, China's August exports to the United States fell 16 percent year-on-year, slowing sharply from a decline of 6.5 percent in July.

A new round of U.S. tariffs on some Chinese goods and Chinese tariffs on United States goods is scheduled to take effect from 0401 GMT on Sunday.

China's politically sensitive trade surplus with the US narrowed to $31.3 billion in August from $27 billion a year earlier.

The Chinese government has agreed to narrow its trade surplus with the USA but is reluctant to give up development strategies it sees as a path to prosperity and global influence. Washington says some must stay to ensure Beijing carries out any promises it makes.

In their latest escalation, Washington imposed 15 per cent tariffs on $US112 billion of Chinese imports and plans to hit another $160 billion on December 15.

China and the USA have agreed to hold high-level talks in early October in Washington, the first in-person discussions since a failed meeting on trade at the end of July. Some 571,000 people entered the labor force in August and almost 590,000 found work, that survey found. US stocks opened higher after the government reported the jobs data.

The two sides have agreed to hold further discussions in Washington in early October, later than expected.

China let its currency slide past the Key 7 per United States dollars mark in August for the 1st time since the global financial crisis in 2007-08, and Washington labeled it a currency manipulator. That would extend penalties to nearly everything the United States buys from China.

China has increased its duty rates and has also asked companies to cancel orders, which has brought down its imports from the US. Some have been hit with increases a couple of times, while about $50 billion of United States goods is unaffected, possibly to avoid disrupting Chinese industries.

However, neither side has backed off recently-imposed tariffs.

China reported a trade surplus of $34.84bn last month, compared with a $45.06bn surplus in July.

"We continue to expect no trade deal in 2019 and even 2020 in our base case, and see the risk of further trade war escalation", she said.



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