BEIJING: China’s imports and exports both fell in June, official data showed yesterday, as weak demand at home and abroad hit trade in the world’s second largest economy.
Beijing’s tariffs war with its top trading partner country has not helped, with imports from the US down nearly 30 percent in the first half of the year.
Globally, China’s exports fell 1.3 percent in June from the same period last year, while imports dived 7.3 percent, according to official data from the customs administration.
Analysts polled by Bloomberg News had forecast exports to dip 1.4 percent and imports to fall 4.6 percent.
After trade talks with the US broke down in May, President Donald Trump hiked duties on $200 billion worth of Chinese goods.
Altogether the two giants have slapped each other with punitive tariffs covering more than $360 billion in two-way trade, damaging manufacturers on both sides of the Pacific.
Beijing’s manufacturing activity also contracted last month.
China’s slowing economy gives President Xi Jinping little room to fight back forcefully against the US — which is using tariffs as leverage to try to force Beijing into opening up its economy.
Trump met his counterpart Xi on the sidelines of the G20 summit in Japan in June and agreed to revive negotiations, but a trade agreement looks increasingly distant.
“While the truce reached between Trump and Xi at the G20 late last month removes the immediate threat of further US tariffs, our base case remains that trade talks will break down again before long,” said Julian Evans-Pritchard of Capital Economics in a note.
Beijing has stepped up support for its economy but the moves have not been enough to offset a domestic slowdown and softening overseas demand for its toys, gadgets and electronics.
China’s total exports ticked up 0.1 percent on-year during the first six months while imports fell 4.3 percent.
Multiple rounds of tit-for-tat tariffs have battered trade with the US.
China’s exports to the US dropped 7.8 percent in June and more than 8 percent over the first half of the year.
Purchases from the US have collapsed, with imports in January-June shrinking to $58.9 billion from $84 billion last year — a roughly 30 percent drop in purchases which has hit American farmers particularly hard.
And despite the hardball tactics from the Trump administration, China’s trade surplus with the US remains heavily lopsided in its favour.
It rose to $29.9 billion in June, from $26.9 billion in May. During the first half of the year, it expanded to $140.5 billion from $133.8 billion last year.
Top US and Chinese negotiators held phone talks on Tuesday but it remains unclear if the wide rupture that has formed since talks broke down in May can be repaired.
On Thursday Trump raised eyebrows with a tweet accusing China of not fulfilling a pledge to buy more agricultural goods, adding: “Hopefully they will start soon!” – AFP
