China: Trade surplus with the US widened to USD34.1bn - Nomura

Analysts at Nomura note that despite the 10pp tariff hikes by the US on ~USD200bn of Chinese imports since 24 September, China’s export growth to the US rose to 14.0% y-o-y in September from 13.2% in August, which resulted in an average growth of 13.0% over the first nine months of 2018 (2017: 11.5%).

Key Quotes

“Growth of imports from the US slowed further to -1.2% from 2.2%, as China slashed its energy and grain imports from the US due to the escalation in China-US trade tensions. The trade surplus of China’s trade with the US widened to USD34.1bn in September from USD31.1bn.”

“Beyond the US, the resilient export growth in September was led by exports to Japan (with export growth up to 14.3% y-o-y from 3.7% in August), the EU (to 17.4% from 8.4%), Russia (to 6.7% from -3.1%) and Brazil (to 3.6% from -5.9%).”

“By product type, export growth of high-tech products rose to 15.9% y-o-y from 10.7% in August, and that of mechanical & electrical products to 14.1% from 9.8%. Export growth of labour-intensive products largely accelerated, led by textile (to 18.2% from 6.0%) and clothing (to 8.3% from 1.1%) categories.”