China October export growth in China is surprisingly strong in the race to beat higher US tariffs

BEIJING (Reuters) – China has announced stronger than expected exports for the month of October, shippers shipping goods to the United States, its main trading partner, seeking to exceed higher duty rates which should come into play early next year.

Import growth also challenged sluggish forecasts, suggesting that Beijing's efforts to ease the slowdown in the economy could begin to slowly begin to take hold.

Exports rose 15.6% last month over the previous year, according to customs data released Thursday, up from 14.5% in September. The reading easily surpassed analysts' expectations in a Reuters poll that forecast a slowdown to 11%, although the estimates have varied widely.

October's import growth accelerated from 14.3% in September to 21.4%, further outpacing analysts' expectations for a slight slowdown to 14%.

China's trade surplus with the United States was $ 31.78 billion in October, compared to a record $ 34.13 billion in September.

October is the first full month after the entry into force of the latest US tariffs.

Despite several series of duties imposed by the United States this year, Chinese exports have shown surprising resistance as companies increase their deliveries before the stricter tariffs in the United States take effect.

Freight rates for container ships from China to the US West Coast remain close to record levels in September, which also suggests solid shipments for the month of November.

Analysts said, however, that the risk of a sharp and sudden collapse in exports is increasing as rate hikes approach, noting that factory surveys have shown a decline in export orders these last months.

US orders of Chinese goods at the last Canton Fair have fallen 30.3% over the previous year, the organizer of the fair said Sunday, while higher US tariffs have returned the goods from batteries to farm tractors more expensive.

COMMERCIAL FUEL TENSION SURPLUS

In the first 10 months of the year, China's surplus to the United States, its largest export market, was $ 258.15 billion, up sharply from $ 222.98 billions of dollars for the same period last year.

Washington and Beijing imposed additional tariffs on their respective products on September 24, and the United States pledged to raise the rate from 10 to 25 percent at the beginning of the year.

President Donald Trump has also threatened to impose duties on almost all Chinese products purchased by the United States. Trump is high against China over intellectual property theft, barriers to the entry of US companies and the gaping commercial gap.

Trump and his Chinese counterpart, Xi Jinping, already spoke by phone last week before a meeting between the two at the G20 summit to be held in Argentina in November.

In terms of trade with all countries, China's surplus stood at $ 34.01 billion in October, up from $ 35 billion in September and $ 31.69 billion in September.

With export prospects clouded by US tariffs and the strong expansion of the Chinese economy since the global financial crisis, Beijing policymakers have recently turned to growth-enhancing measures, including export tax cuts and the promise of increased support for private companies.

China is also ready to reduce import taxes on more goods, including machinery, as of November 1, in addition to the cuts implemented earlier this year, to reduce costs for consumers and businesses.

President Xi said at the opening of an exhibition on imports this week that he expects China to import $ 30 billion worth of goods and $ 10 trillion of services over the next 15 years. Last year, Xi estimated that China would import $ 24 billion worth of goods over the next 15 years.