(Bloomberg) -- Chinese export growth accelerated in October as companies rushed to make shipments before higher tariffs kick in.
- Exports rose 15.6 percent in dollar terms in October from a year earlier, exceeding estimates for 11.7 percent
- Imports surged 21.4 percent, topping the estimate of 14.5 percent
- The trade surplus widened to $34 billion from $31.7 billion in September
Key Insights
- With the U.S. set to increase the tariffs on $200 billion worth of imports from China to 25 percent in January, there is a large incentive for Chinese companies and their American customers to trade as much as possible now.
- The effect could be more apparent in imperishable products like metals, textiles, chemicals, and plastic goods, according to Iris Pang, Greater China economist with ING Bank NV in Hong Kong.
- Although leaders of the two nations are expected to meet at the upcoming Group of 20 summit, and there’s has been some indication that the two sides are looking to reduce tensions, there’s no certainty for business yet that tariffs won’t rise further next year.
- There’s a high correlation between exports and imports in China’s trade, so the robust shipments probably has some impact on how much China buys from overseas.
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- Notwithstanding the continued strong trade data, the domestic economy continues to slow, with the October reading of the manufacturing purchasing managers index missing estimates and new export orders falling to the lowest level since early 2016.
- Concern over the increasing downward pressures prompted the nation’s top leaders to announce further stimulus after a Politburo meeting chaired by President Xi Jinping last week.