China’s exports higher than expected as shippers rush to beat next round of trade war

Chinese exports and imports both grew more than expected in October, the first full month of data since the latest US tariffs went into effect.

Exports rose 15.6 per cent last month compared to a year earlier, according to data released by the General Administration of Customs on Thursday.

This was an acceleration from September’s 14.5 per cent gain and higher than the median forecast of an 11.7 per cent rise by economists in a Bloomberg survey.

Imports also beat expectations, jumping 21.4 per cent, up from 14.3 per cent in September and well above the Bloomberg median forecast of 14.5 per cent.

China’s forex reserves hit 18-month low as trade war piles pressure on yuan

China’s total trade surplus rose to US$34.01 billion for October from September’s US$31.69 billion, but was below the median forecast of US$35 billion.

However, its surplus with the US fell to US$31.78 billion in October, down from a record high of US$34.13 billion in September.

The data shows the trade war with the US having little negative impact on China trade, at least so far.

However, economists expect the trade war’s impact to increase early next year, especially if the US goes ahead with the planned increase in tariffs from the beginning of next year.

When US President Donald Trump imposed 10 per cent tariffs on US$200 billion worth of Chinese imports in September, he announced the tariff rate would rise to 25 per cent on January 1 if Beijing did not make concessions.

As a result, shippers have rushed to fill orders that would normally have been placed early next year to avoid the higher tariff rate.

With no clear resolution of the trade conflict on the horizon, Beijing is increasingly nervous about the outlook for the economy, which grew 6.5 per cent in the third quarter, the slowest pace in a decade.

In response, the government launched a series of measures to support the economy, including cutting individual taxes, speeding up infrastructure spending and extending additional financing options to help struggling smaller companies.

China’s growth is likely to slow further in the coming months as the trade war takes its toll.