August exports forecast strong amid US tariffs

By Reuters – Global Times Source:Reuters Published: 2018/9/5 19:58:42

Nation’s import growth expected to downshift from July: Reuters poll

Official Chinese data this week is expected to show export growth remained strong in August, a Reuters poll showed.

But import growth, while still solid, is expected to downshift from July.

Even with US tariffs targeting $50 billion worth of Chinese exports going into effect for their first full month in August, Chinese shipments likely still rose 10.1 percent year-on-year, according to median estimates from 26 economists.

That would mark a slight decline from 12.2 percent in July but would still be the fifth month in a row of double-digit gains even as US trade tensions flared.

More sweeping US measures are on the way, with the US expected to impose duties on another $200 billion worth of Chinese imports this month.

Some analysts believe Chinese exporters are continuing to rush out shipments ahead of further US tariffs, buoying the headline growth readings, while some companies like steel mills are diversifying and selling more products to other countries.

Other economists have noted that disruptions in supply chains and prices are likely to be more company specific initially, and will take some time to be reflected in broader economy data and corporate earnings reports.

Nevertheless, companies in some of China's North Asian neighbors such as Japan are reporting weaker Chinese orders, according to business surveys.

China's imports likely rose 18.7 percent in August year-on-year, slowing from July's surprisingly high 27.3 percent growth and at odds with a decline suggested in the official factory survey.

Its overall trade surplus is expected to have expanded to $31.79 billion in August, from $28.05 billion the previous month.

The trade surplus with the US will also be closely dissected.

China's exports to the US rose 11.2 percent in July, while its imports rose 11.1 percent.

China's surplus with the US rose to $28.93 billion in June, and any further increase could further inflame the bitter dispute with the US.

"We expect that, if implemented, this latest set of tariffs would likely trigger a meaningful policy response from China, which has already embarked on a path of defensive easing," Morgan Stanley economists wrote in a report.

Morgan Stanley estimates the final impact of the tariffs, after considering the policy response, may reduce China's GDP growth by 0.2 percentage points, with a 0.1 percentage point decline for US GDP growth.

Posted in: ECONOMY

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