China: Exports drop in September on continued U.S.-China trade tensions
In September, exports fell 3.2% over the same month last year. The print was lower than both the 1.0% drop recorded in August and the 2.8% contraction expected by market analysts. September’s contraction mostly reflected a sizeable drop in shipments to the United States.
Imports fell 8.5% in annual terms in September, following August’s 5.6% drop. The reading was worse than the 6.0% decline that market analysts had projected.
As a result of the sharp decrease in imports, the trade surplus rose to USD 39.7 billion in September 2019 from USD 30.3 billion in September 2018 (August 2019: USD 34.8 billion surplus). The 12-month moving sum of the trade surplus increased to USD 430 billion from USD 421 billion in August.
Following the recent news that progress has been made in trade talks between the U.S. and China, Iris Pang, an economist at ING, commented that:
“There is a five week period for the two sides to write down exactly what they agreed to in the meeting. This raises questions about how much “progress” has really been made. […] A statement is scheduled to be released in November. The timing is important because planned US tariffs are due to go into effect in December, hitting an additional $160 billion of Chinese-made consumer goods. If the two sides cannot release a draft agreement as planned in five weeks, it will not bode well for a trade truce.”