China reported higher-than-expected exports in October as local traders are hurrying to send their goods to the US, avoiding higher duties that come into effect from the beginning of next year. There is also an increase in imports despite the expected slowdown, suggesting that Beijing’s efforts to soften the effects on the cooling economy already appeared.
Last month, the country’s export grew by 15.6% compared to the previous year, according to customs data published on Thursday. This is acceleration since September, when it grew by 14.5%. The analysts’ expectations were for delay of growth to 11%.
The import growth for October accelerated to 21.4% from 14.3% in September, again surprising analysts expecting a slight slowdown of up to 14%.
China’s trade surplus with the United States, however, shrank slightly over the past month to 31.78 billion USD from a record 34.13 billion USD in September. October is also the first full month after the last round of American custom duties came into force.
Despite this series of US tariffs, Chinese exports have been surprisingly resilient this year, with companies hurrying to export their goods before the heavier duties come into force on January 1, 2019. Cargo ships traveling from China to the West Bank continue to keep record high number since September, suggesting that stable trade will also be observed in November.
However, analysts warn that the risk of a sudden and significant drop in exports is rising as the year-end approaches, with factory surveys showing declines in export orders in recent months.
In the first 10 months of the year, the Chinese surplus with the United States, which is its largest export market, amounted to 258.15 billion USD. This represents a significant increase over the previous year, when it amounted to 222.98 billion USD.
Washington and Beijing have introduced new reciprocal customs duties on September 24th, with the US promising to dramatically raise the rate from 10% to 25% from the beginning of 2019. The US President Donald Trump has also threatened to impose duties on virtually all Chinese imports to the US.
Last week, Trump and his Chinese counterpart, Xi Jinping, had a telephone conversation, both of whom are also expected to meet at the G20 in Argentina at the end of this month.