China reported much stronger-than-expected exports for October as shippers rushed goods to the United States, its biggest trading partner, racing to beat higher tariff rates due to kick in at the start of next year.
Import growth also defied forecasts for a slowdown, suggesting Beijing’s growth-boosting measures to support the cooling economy may be slowly starting to make themselves felt.
The upbeat trade readings from China offer good news for both those worried about global demand and for the country’s policymakers after the economy logged its weakest growth since the global financial crisis in the third quarter.
October was the first full month after the latest U.S. tariffs on Chinese goods went into effect on Sept. 24, in a significant escalation in the tit-for-tat trade battle.
But analysts continue to warn of the risk of a sharp drop in U.S. demand for Chinese goods early in 2019, with all eyes now on whether presidents Donald Trump and Xi Jinping can make any breakthroughs on trade when they meet later this month.
“The strong export growth in October was buoyed by front-loading activities by exporters…,” said Iris Pang, Greater China Economist at ING in Hong Kong, noting the month is traditionally quieter due to long holidays.
“We expect exports to remain strong toward the end of the year as businesses are afraid of a failure in the Trump-Xi meeting, which could lead to broader tariffs on more Chinese goods from the U.S.,” Pang said.
Container ship rates from China to the U.S. West Coast remain near record highs, suggesting shipments will remain solid well into November and possibly early December. China’s exports to the U.S. rose 13.2 percent from a year earlier in October.
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