China's Exports Surge Despite Trade Tensions -- Update
BEIJING--China's exports surged unexpectedly in February, further widening its global trade surplus at a time when the Trump administration has put a special focus on its trade deficit with Beijing.
Chinese exports jumped 44.5% in February from a year earlier, the General Administration of Customs said Thursday. Economists polled by The Wall Street Journal had forecast a 8.5% increase. At the same time, a 6.3% rise in imports was smaller than the market expected.
That meant China's overall trade balance widened to $33.74 billion last month, up from $20.34 billion in January. Economists taking business closures for the Lunar New Year into account had predicted imports would exceed exports by $5.4 billion.
"The much-higher-than-expected export growth showed that global demand is pretty robust, which could continue to offer a big support for Chinese economy this year," said Larry Hu, an economist with Macquarie Group.
Liu Xuezhi, an economist with Bank of Communications, advised not to read too much into the export growth in February as disruptions from the holiday, which fell in January last year but February this year, make data early in the year highly volatile. Rising trade protectionism, especially from the U.S., is the biggest threat to China's export prospect, Mr. Liu said.
President Donald Trump has drawn concerns of a global trade war with a plan to increase tariffs for imported steel and aluminum products over broad opposition from U.S. trading partners as well as U.S. lawmakers. On Wednesday, Mr. Trump tweeted: "China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States."
China's trade surplus with the U.S. narrowed to $20.96 billion in February from $21.9 billion in January. China exported $31.7 billion in goods to the U.S., representing 18.5% of its total exports.
While China produces half of the world's steel, most of it never leaves the country and the impact of the proposed U.S. tariffs on Chinese steelmakers is ultimately expected to be small.
But the U.S. is still the largest market for Chinese exporters, and Chinese officials have been cautious in their responses to Mr. Trump's gambit.
"Seeing China as a rival trying to displace the U.S. is a fundamental strategic misperception," Chinese Foreign Minister Wang Yi said in a news briefing on the sidelines of China's annual legislative session on Thursday.
"History teaches that trade wars are never the right solution," Mr. Wang said. "In the event of a trade war, China will make proper and necessary responses."
Last year, a recovering global economy and demand helped China post an uptick in annual growth for the first time in several years.
China's top state planner said earlier this week it expects foreign trade to maintain stable growth this year, with exports contributing 8% to 9% to GDP growth, a pace on par with last year's level.
(END) Dow Jones Newswires
March 08, 2018 02:06 ET (07:06 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.