Chinese Economics Thread

[Jura The idiot]

now I read
Economic Watch: China records sound Q1 trade, surplus narrows
Xinhua| 2018-04-13 19:58:29

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China Friday reported sound growth in foreign trade for the first quarter and an over one-fifth drop in the trade surplus, pointing to a more balanced trade picture.

The country's goods exports rose 7.4 percent year on year in the first three months while imports grew 11.7 percent, resulting in a trade surplus of 326.18 billion yuan (about 51.85 billion U.S. dollars), according to the General Administration of Customs (GAC).

The surplus was 21.8 percent lower compared with the first quarter last year. In March alone, China posted a trade deficit of 29.78 billion yuan, the first monthly deficit since February 2017, GAC data showed.

Total foreign trade volume expanded 9.4 percent to 6.75 trillion yuan in the first quarter from the same period last year.

BETTER TRADE STRUCTURE

Huang Songping, spokesperson for the GAC, told a press briefing that the relatively fast trade growth was a result of a mild global economic recovery that has given rise to robust trading activities, as well as the sound development of the domestic economy, which has strengthened demand for imports.

Steady progress in the Belt and Road Initiative and stronger trade with emerging markets also supported the first-quarter growth, Huang said, as trade volume with Belt and Road countries jumped 12.9 percent in the three-month period, 3.5 percentage points faster than the overall increase.

Trade with countries along the Belt and Road reached 1.86 trillion yuan, accounting for 27.5 percent of China's total foreign trade in the first quarter, according to Huang.

The country's less developed regions, including central and western China, all outpaced the national average trade growth in the January-March period.

Huang admitted that the yuan's appreciation against the U.S. dollar had an impact on China's foreign trade in the first quarter, but said the impact was "limited."

The yuan has appreciated more than 3.7 percent against the greenback in the first quarter of 2017, the largest rise since 2008.

NOT A SURPLUS SEEKER

From January to March, trade between China and the United States rose 13 percent in dollar-denominated terms, with Chinese exports to the United States increasing 14.8 percent and the China-U.S. trade surplus standing at 58.25 billion dollars.

"China has never sought a trade surplus," Huang said, noting that the current trade situation is determined by the market and ultimately by the economic structure and industrial competitiveness of the countries involved.

"China's trade surplus with the United States is not as big as it looks if we take into account factors such as statistical approaches, entrepot trade and service trade," he said.

"We expect the United States to listen with patience to rational, pragmatic views on the deficit, and to suggest remedies for the imbalances to ensure the long-term, steady development of economic and trade ties between the two countries," he added.

WIDER OPENING-UP

Huang said he sees rising pressure and challenges for the global economy and international trade in the second quarter stemming from global uncertainty and intensifying protectionism.

Fiercer competition in the global manufacturing sector will also pose challenges for China's foreign trade, he said.

However, Huang said he expects China's foreign trade will maintain an upward trend as the country has pledged to take measures to further open up its market and expand imports.

China said earlier this week it will launch a number of landmark measures this year to significantly broaden market access.

The country pledged measures including significantly lowering import tariffs for vehicles, while reducing import tariffs for some other products, and enhancing protection of intellectual property rights.

Investment bank China International Capital Corporation (CICC) said it expects China's import growth to exceed that of exports in 2018 on back of these measures.

The tax and fee reduction package announced by the Chinese government this year will also boost domestic demand and support the country's economic growth in the second quarter and the latter half of this year, the CICC said in a research note.

 

[supercat]

Spoiler alert: studying of satellite imaging indicates that China's GDP growth may be understated.

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[manqiangrexue]

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China's Q1 trade surplus with US up nearly 20% but narrows in March
China's overall exports and imports both grew at a strong double-digit clip early in the year

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| Beijing Last Updated at April 13, 2018 16:26 IST

China's trade surplus with the United States surged nearly 20 percent in the first quarter, with some analysts speculating exporters were rushing out shipments to get ahead of threatened tariffs that are spurring fears of a full-blown trade war.

The latest readings on the health of China's trade sector are unlikely to ease tensions following weeks of tit-for-tat tariff threats by Washington and Beijing, though they suggest China's

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is still in relatively solid shape.

Even as China's trade surplus narrowed overall in the first three months of the year, its surplus with the US surged 19.4 percent to $58.25 billion from a year earlier, customs data showed on Friday.

While China was busy selling more to the US, it was buying more from other countries, and ran a $9.86 billion deficit with the rest of the world in the quarter.

China's overall exports and imports both grew at a strong double-digit clip early in the year, and while exports unexpectedly fell in March -- resulting in a rare trade deficit -- most analysts chalked it up to seasonal factors and said it was too early to call a trend.

Still, while no hard timeline has been set by either Washington or Beijing for the actual imposition of tariffs, analysts said China's exporters may already be adapting their strategies as punitive trade measures loom.

China's first-quarter exports to the US rose 14.8 percent from a year earlier, despite a 5.6 percent drop in March. Its imports from the US rose 8.9 percent in the quarter and 3.2 percent in March.

That helped narrow its surplus with the US in March alone to $15.43 billion from $20.96 billion in February, but that was still nearly 18 percent higher than March 2017.

"The sharp decline in March export growth after very solid performance in January and February suggests some exporters may have front-loaded exports (early) this year due to concern over the possibility of a Sino-US trade war after the US hiked tariffs on global imports on solar panels and washing machines," said Lisheng Wang, an economist at Nomura in Hong Kong.

"We believe export growth will slow due to yuan appreciation and rising trade tensions...China's imports could be more resilient than exports in our view as China has pledged to increase imports," Wang said.

China's total aluminium exports in March rose to their highest since June, just as the United States imposed tariffs on imports of the metal and steel on March 23.

Seasonal export dip in March

For the first quarter as a whole, China's exports grew a hearty 14.1 percent from a year earlier.

March shipments fell 2.7 percent, however, lagging analysts' forecasts for a 10.0 percent increase, and down from a sharper-than-expected 44.5 percent jump in February, which economists believe was heavily distorted by seasonal factors.

"Most of (the March) drop is seasonal - Chinese New Year was later than usual this year, meaning more of the holiday disruptions will have dragged into March than in 2017," Capital Economics Senior China Economist Julian Evans-Pritchard wrote in a note.

March import growth of 14.4 percent beat expectations, however, suggesting China's domestic demand may still be solid enough to cushion the blow from any trade shocks.

Analysts had expected imports to grow 10.0 percent in March, picking up from 6.3 percent growth in February.

That produced an unexpected trade deficit of $4.98 billion for the month, but such shortfalls are not uncommon for China early in the year, again likely due to holiday distortions.

For Jan-March, imports rose a strong 18.9 percent on-year.

Imports of commodities continued to lead the way in March as manufacturers replenished inventories ahead of a seasonal pick-up in demand. Shipments of copper, crude oil, iron ore and soybeans all rose from the previous month.

Analysts are still expecting China's economic growth to slow later in the year, however, as a cooling property market weighs on demand for building materials from cement to steel.

Outlook cloudy

China's exports rode a global trade boom last year, expanding at the fastest pace since 2013 and serving as one of the key drivers behind the economy's forecast-beating 6.9 percent expansion.

But the sudden spike in trade tensions with the United States is clouding the outlook for both China's "old economy" heavy industries and "new economy" tech firms alike.

Washington says China's $375 billion trade surplus with the United States is unacceptable, and has demanded Beijing reduce it by $100 billion immediately.

In a move to further force China to lower the billions of goods trade surplus running with the US, Trump unveiled tariff representing about $50 billion of technology, transport and medical products early this month, drawing an immediate threat of retaliatory action from Beijing.

China's tech sector, which is key part of Beijing's longer-term "Made in China 2025" strategy to move from cheap goods to higher-value manufacturing, may be particularly vulnerable.

Hi-tech products have been among its fastest growing export segments. China exported $137.8 billion worth of high-tech products in the first quarter, up 20.5 percent on-year.

 

[Orthan]

it appears that germany too is getting frustrated with china´s policies.

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[Dolcevita]

it appears that germany too is getting frustrated with china´s policies.

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German Angst. Yes, But where did you get the frustration part? Are you saying they are rightfully frustrated because Bauer used to monopolize a sophisticated drilling machine and they are not able to do so anymore as Chinese competitors move up the value chain and am able to compete and causing their revenue to drop? If that is case, then get used to being frustrated as the Chinese companies will continue to move up the value chain,


-Bauer, a big producer of construction equipment, is better placed than many German companies that invested heavily in China over the past few decades.
-The Bavaria-based firm, which traces its roots back to 1790, does not have to worry about keeping a Chinese joint venture partner happy because it is the sole owner of its two plants in Shanghai and Tianjin. And the specialist engineering machines Bauer produces there are sold in countries across Asia, shielding the group from swings in the volatile Chinese building market.
-CEO Thomas Bauer is worried about his company’s place in China and a broader economic relationship that until recently was seen by German corporations and politicians as a lucrative one-way bet.
-Bauer AG, which employs 11,000 workers in 70 countries, built its first production facilities in China in the mid-1990s. At the time, not a single Chinese firm could make the sophisticated drilling machines it produces – towering yellow structures used to build the foundations for skyscrapers, power stations and airports.
-By 2013 Bauer counted 36 Chinese competitors able to make such machines, a shift the CEO says was accelerated by European suppliers selling co-designed parts to the Chinese.
-A decade ago, the company’s Chinese plants generated revenues of 109 million euros. Sales slumped to less than half that amount in five of the nine years that followed.
-Today, what Bauer and other German firms say they are most worried about is the role of the Chinese state in the economy.

 

[keldon]

it appears that germany too is getting frustrated with china´s policies.

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Frustrated is the correct adjective, however the target is wrong. If you read the article carefully then you'll notice that the frustration is about China becoming a competitor and not just a customer. Dolcevita already pointed this out for you.

You see, Germany is a heavily export focused economy, in the past several decades China was the only one who could absorb the extra output. But when the decades long good customer slowly turns into a powerful competitor, who'll not only buy less you, but also fight for your other customers, then the frustration is kinda apparant.

btw. such complaining from German industry is not seldom in regard to China, and i personally view them more as a help call to the German government than a outcry because of unfairness. I.e. "Chinese buisnesses are getting such high support from their government, we want it too." Funny thing is the German goverment is already very corporate friendly, just take alook at Volkswagen and the whole emission thing.

To have a overview in which predicament the German economy is stuck in, i recommend this interview. It's in German, but google translate should reasonably well handle it. There is also a part about China close to the end of the interview

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[Hendrik_2000]

Frustrated is the correct adjective, however the target is wrong. If you read the article carefully then you'll notice that the frustration is about China becoming a competitor and not just a customer. Dolcevita already pointed this out for you.

You see, Germany is a heavily export focused economy, in the past several decades China was the only one who could absorb the extra output. But when the decades long good customer slowly turns into a powerful competitor, who'll not only buy less you, but also fight for your other customers, then the frustration is kinda apparant.

btw. such complaining from German industry is not seldom in regard to China, and i personally view them more as a help call to the German government than a outcry because of unfairness. I.e. "Chinese buisnesses are getting such high support from their government, we want it too." Funny thing is the German goverment is already very corporate friendly, just take alook at Volkswagen and the whole emission thing.

To have a overview in which predicament the German economy is stuck in, i recommend this interview. It's in German, but google translate should reasonably well handle it. There is also a part about China close to the end of the interview

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Gerade aus Das is ya ganz direkt antwort zu die frage ob China ist beantwortung fur deutscland klage

 

[keldon]

Gerade aus Das is ya ganz direkt antwort zu die frage ob China ist beantwortung fur deutscland klage

OK, i retract the statement google translate can reasonably handle German... I still hope anyone who wishes to read that interview can understand most of it. I really don't want to translate the whole thing...

 

[Orthan]

ZTE has been barred from exporting technology from the US.

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This article mentions that american companies can no longer sell components to ZTE. Does this means that ZTE is pretty much out of the US market?

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[manqiangrexue]

ZTE has been barred from exporting technology from the US.

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This article mentions that american companies can no longer sell components to ZTE. Does this means that ZTE is pretty much out of the US market?

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I don't think so. It's different from an import ban but it means that ZTE will have to buy its components elsewhere (hopefully, Chinese manufacturers will rise to the challenge) or it will need the to make a front company to buy the US components to hand over to ZTE.