Chinas trade surplus with the US swells to a record high

China\s trade surplus with the US swells to a record high

China posts record trade surplus with the US in September, Beijing says

China recorded a record trade surplus of $34.13 billion with the U.S. in September amid intense trade tensions between the worlds two largest economies.

The September surplus with the U.S. was larger than Chinas overall trade surplus of $31.69 billion for the month.

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The worlds two largest economies are locked in a bitter trade dispute, with U.S. President Donald Trump taking issue with his countrys massive trade deficit against China.

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For January-September, Chinas trade surplus with the United States was $225.79 billion, compared with about $196.01 billion in the same period last year, Reuters calculations showed.

Overall, Chinas dollar-denominated September exports surged 14.5 percent from a year ago, beating a Reuters analyst poll forecasting 8.9 percent growth in the same period. In August, Chinese exports grew 9.8 percent from a year ago.

The United States and China imposed new tit-for-tat tariffs against each other's goods in late September, the latest escalation in a heated trade war between them.

In September, imports into China grew 14.3 percent from a year ago, missing analysts predictions of 15 percent growth and slowing from growth of 19.9 percent for the month of August.

The worlds top two economies imposed new tariffs on a massive amount of each others goods mid-September, with the US targeting $200 billion in Chinese imports and Beijing firing back at $60 billion worth of US goods.

Despite escalating trade tensions with the U.S., Chinese data show the economy has largely held up so far.

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Economists say the phenomenon is mostly due to exporters benefiting from increased orders before the tariffs hit, but the figures are likely to show stress in the months ahead.

“China-US trade friction has caused trouble and pounded our foreign trade development,” customs spokesman Li Kuiwen told reporters Friday, adding that the overall situation could be controlled.

The U.S. and China imposed the latest round of tit-for-tat tariffs against each others goods in September.

The rejection goes both ways. Foreign buying in China’s stock market has dried up, exacerbating the Chinese market’s fall. The global market is tied closely together, so that pulling on one market causes others to fall. Tariffs reduce global trade. For China to support the Yuan in the face of U.S. tariffs, it must sell dollars and dollar-denominated assets. As was true in 1930, with the Smoot Hawley tariff, taxing trade doesn’t improve the domestic economy in an interdependent world.

Trumps willingness to antagonize the world triggers China-India rapprochement

“With global growth likely to cool further in the coming quarters and US tariffs set to become more punishing, the recent resilience of exports is unlikely to be sustained. Meanwhile, with policy easing unlikely to put a floor beneath domestic economic activity until the middle of next year, import growth is set to slow further,” said Julian Evans-Pritchard, senior China economist at Capital Economics, a consultancy.

The big lie in all of this is that China’s trade deficit is some sort of threat to U.S. sovereignty, that trade deficits must be made up with debt purchases. It’s not true. When Apple (NASDAQ:AAPL) has its phones assembled in China that reduces its cost of goods sold. It creates efficiency, which lets it sell more phones around the world. It doesn’t mean Apple is borrowing from China. Global trade means more jobs. Which means less global trade means fewer jobs.

Even though the U.S. and China dont appear to be near a resolution in their trade discussions, the impact of U.S. tariffs on Chinese total industrial production will be limited, said Zhang Zhiwei, Deutsche Banks chief economist and head of equity strategy for China.

The U.S. Treasury reported in July that China held $1.17 trillion in U.S. treasury securities, about 18.7% of total foreign holdings. That’s down from a peak of $1.20 trillion in April 2017. The U.S. is now adding $1 trillion to its debt pile each year, more than double the level of 2015.  Government debt, unlike trade deficits, must be paid back.

U.S. tightens controls on China imports of nuclear components

If Trump imposes tariffs on an additional $267 billion of Chinese imports into his country, the Asian powerhouses exposure to the U.S. market would only be 2 percent of its total industrial production, according to a study by Zhang.

Apprehensions about China becoming a dominant global power keep not only Western governments awake at night but also the Indian establishment. Indias population nurtures suspicions about Chinas motivations and impact. During the Sino-Indian military standoff over Bhutan at Doklam in the summer of 2017, nationalistic calls for boycotting Chinese goods could be heard across India. A survey by the Pew Research Center that year showed that 41 percent of Indian citizens held an unfavorable view of China while only 9 percent of Indians felt that negatively about the US.

So Chinas “focus now is to try to retain supply chains that support the rest of the world” that make up 25 percent of the countrys total industrial production, Zhang told CNBC, citing the example of Apple iPhones exported to Europe.

So, in spite of Trumps belligerent and strategically incoherent approach, a sort of national consensus exists in India that China is a competitor and rival which does not want India to go up in world affairs. There is a structural rootedness to this perception because India believes it alone among all the emerging nations has the size, demographic and economic potential to become Chinas equal in the international power configuration. Just as China is looking to narrow the power gap with the US, India seeks to do the same with China.

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Trump has taken up cudgels against all and sundry in the international community during his first two years in office. His indiscriminate offensive foreign policy, if prolonged, can set up a US versus Rest of the World matchup. By virtue of their clout and ambition, China and India will then find themselves at the forefront of a collective pushback against Trump. But these future diplomatic possibilities hinge on whether the self-described “stable genius” keeps winning American hearts and minds.

Unwelcome guest: U.S. tariffs loom at Chinas biggest trade fair

Hong Kong (CNN Business)Chinas massive export machine is shrugging off the trade war, but there are doubts how much longer it can keep it up.

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China trade surplus with US widens to record $34.1B

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For its part, Gazproms Power of Siberia, which is expected to become operational on December 20, 2019, is designed to deliver 38 billion cubic meters of Russian gas to China annually. And that is not all: According to Gazprom estimates, Chinas pipeline gas demand may soar up to 110 bcm by 2035. So, probably, the Russian gas giant will need to lay another pipe to the country.


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