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China’s import roars back to life in January; exports also beat forecasts


China’s trade machine kicked up a gear in January after stumbling the previous month, with exports and imports both growing much more than expected. Exports in January rose 11.1 percent from a year earlier, picking up from a 10.9 percent gain in December, official data showed. Analysts had expected growth to cool for a second straight month to 9.6 percent. Imports surged 36.9 percent, the General Administration of Customs said, the fastest pace since last February and smashing analysts’ forecast of 9.8 percent growth. However, data from China in the first two months of the year must always be treated with caution due to business distortions caused by the timing of the long Lunar New Year holidays. Some of the jump in imports may have been due to inventory building ahead of the holidays rather than a pick-up in consumption, though economists said the data was still positive. China benefited from a global trade boom in 2017. However, while global demand is tipped for another strong year, expectations of growing trade disputes with the United States could weigh on China’s shipments in 2018. President Donald Trump slapped steep tariffs on imported washing machines and solar panels last month. China is the world’s biggest solar panel producer. Trump also is considering recommendations on import restrictions for steel and aluminum or other trade sanctions against China over its intellectual property practices. “The uncertainty surrounding Sino-U.S. trade ties remains a key potential downside risk in the near term”, said Betty Wang, senior China economist at ANZ in Hong Kong. Sharp gains in the yuan are also threatening China’s competitiveness, with an official business survey last week suggesting the currency’s appreciation led to a decline in big exporters’ activity last month.

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