China’s exports fall for second year as US trade war fears mount

* Protectionist Trump may limit export growth
* 2016 exports —7.7 pc y/y, imports —5.5 pc y/y
* December exports worse than expected
* Commodities imports soar, boost global prices

BEIJING: China’s massive export engine sputtered for the second year in a row in 2016, with shipments falling in the face of persistently weak global demand and officials voicing fears of a trade war with the United States that is clouding the outlook for 2017.
China’s exports fell 7.7 per cent in 2016 from a year earlier, while imports slid 5.5 per cent, leaving the country with a trade surplus of $509.96 billion, official data showed on Friday.
The world’s largest trading nation could be heavily exposed to US protectionist measures if President-elect Donald Trump follows through on campaign pledges to label it a currency manipulator on his first day in office and impose heavy tariffs on imports of Chinese goods.
Even if Trump takes no concrete action immediately, analysts say the spectre of growing US-China political tensions is likely to weigh on the confidence of exporters and investors worldwide.
Trump may limit the growth of China’s exports by imposing greater trade protectionist measures, China’s customs agency said on Friday.
“The trend of anti-globalisation is becoming increasingly evident, and China is the biggest victim of this trend,” customs spokesman Huang Songping told reporters, adding it will be difficult for the country’s foreign trade to improve in 2017.
“We will pay close attention to foreign trade policy after Trump is inaugurated president,” Huang said. Trump will be sworn in on January 20.
China’s trade surplus with the United States was $366 billion in 2015, according to US customs data, which Trump could hammer on in a bid to bring Beijing to the negotiating table with Washington, economists at Bank of America Merrill Lynch said in a recent research note.
A sustained bilateral trade surplus of more than $20 billion against the United States is one of the three criteria used by the US Treasury Department to designate another country as a currency manipulator.
On Wednesday, China may have set off a warning shot to the Trump administration that it is prepared to push back. Beijing announced even higher anti-dumping duties on imports of certain animal feed from the United States than it proposed last year.
December exports fell by a more-than-expected 6.1 per cent from a year earlier, while imports beat forecasts slightly, growing 3.1 per cent on strong demand for commodities from coal to iron ore which has helped buoy resources prices globally.
Analysts polled by Reuters had expected December exports to have fallen 3.5 per cent on-year, a contraction from an unexpected 0.1 per cent rise in November that had raised hopes that sluggish global demand was bottoming out.
Imports were expected to have grown for a second month but at a slower pace of 2.7 per cent, after soaring 6.7 per cent in November.
China reported a trade surplus of $40.82 billion for December, versus November’s $44.61 billion. — Reuters