China’s imports of US goods may drop over 10% in Q1 amid virus onslaught: poll

By GT staff reporters Source:Global Times Published: 2020/2/10 20:08:40

China to honor trade deal despite epidemic: expert

Aerial photo taken on Jan. 19, 2020 shows ro-ro ships at the Xiuying Port in Haikou, capital of south China's Hainan Province. The Qiongzhou strait witnessed a travel rush peak as the Spring Festival is approaching. Photo:Xinhua

China's imports of US goods are likely to drop over 10 percent year-on-year in the first quarter as the outbreak of novel coronavirus pneumonia (NCP) delayed some domestic demand, and there would be a rebound in bilateral trade in the second quarter if the epidemic is contained in a timely manner, as China is committed to the phase one trade deal's implementation, according to a Global Times Source poll.

Seven out of 17 well-known Chinese economists and industry experts surveyed by the Global Times Source forecast that Chinese imports from the US will fall 10-20 percent on a yearly basis in the first quarter and four believed the drop would exceed 20 percent. But three of them reckoned there would be growth in imports thanks to domestic demand for medical goods amid the epidemic. 

The remaining few said it was too hard to make predictions or said that the US is not the only country whose trade would be affected as the impact is global.

Participants included Wei Jianguo, a former Chinese vice commerce minister, He Weiwen, a former senior Chinese trade official, Sheng Songcheng, a former central bank official, Chen Fengying, a research fellow at the China Institutes of Contemporary International Relations, and Yang Changyong, a senior research fellow at the Chinese Academy of Macroeconomic Research.

They noted the epidemic, a black-swan event, has brought challenges to China's trade with the US in the short term, but expressed confidence about the resilience of Chinese economic development, which will help drive bilateral trade growth as the government has rolled out measures to secure resumption of factory work.

Seasonal factors and the virus' impact on logistics and supply chains are major reasons that may cause China to buy less from the US during the special period, said Cong Yi, a professor at the Tianjin University of Finance and Economics.

"China's production and foreign trade usually report some drops in the first quarter when the weeklong Chinese traditional Spring Festival falls, and this year the extended holiday due to the viral epidemic added complications," Cong noted. 

Many companies have to remain closed because of the virus, which left them unable to import products from the US in such sectors as chips, energy and aircraft, said Bai Ming, a deputy director of the Ministry of Commerce's International Market Research Institute.

Sheng said the impact will mainly hit in February and if the epidemic is controlled this month, normal production will resume in March when China's imports from the US will also become normal and rebound. 

China's imports from the US fell by 28.3 percent year-on-year to 193.43 billion yuan ($27.7 billion) in the first quarter of 2019 and exports stood at 622.43 billion yuan, down 3.7 percent, according to data released by Chinese customs.

Wei and Sheng both projected the drop in China's imports of US goods would be around 15 percent in the first three months over the previous period last year.

Others cited the possibility of a drop in imports of more than 20 percent year-on-year, which might have a large effect on domestic economic growth.

They said that imports from the US are greatly restricted by problems in the domestic transport network and constrained market demand.

As of press time on Monday, the number of confirmed cases of novel coronavirus pneumonia infection exceeded 40,000 and the death toll rose to more than 900 domestically.

Expert said that China's exports, animal products in particular, to the US will also drop in the first quarter, as many export companies cannot resume production, failing to complete orders from the US market. They noted that certain restrictions over ships and flights from China to enter the US as well as strengthened border quarantines will also mean Chinese exporters will fail to get their products delivered.

But on the whole, the decline in imports will not change China's trade surplus with the US too much, said Wu Jinduo, head of fixed income at the research institute of Great Wall Securities.

Although the epidemic will slow China's pace of importing US goods for a short period, the country will endeavor to implement its promises in its phase one trade deal with Washington, Bai said.

China on Thursday said it would halve tariffs on some $75 billion in US imports starting Friday.

As China is carrying out its purchase plan written in the phase one trade deal step by step and given the low base in the same period last year, China's imports of US goods are very likely to increase instead of falling in the first three months, said Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing.

In the special context of virus prevention and control, China should also increase buying certain kinds of goods such as medical products from the US, and China's demand for US agricultural products like soybeans are still great, experts said.

"The products that we plan to import in the first phase trade agreement will definitely increase dramatically," Gao said, noting that due to the impact of the epidemic, it is difficult to foresee the specific growth rate.

Experts also said the epidemic has affected world trade, and the priority is to contain the virus. Government measures to help secure factories' recovery should be put into practice as soon as possible to help trade firms get through the hard time.

Newspaper headline: Imports from US may fall

Posted in: ECONOMY

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