China saw its foreign trade decline in 2016, with exports (-7.7%) and imports (-5.5%) showing a sharp decline and confirming the Asian giant’s breathlessness, at a time when rhetoric Anti-Chinese Donald Trump could exacerbate the situation.
Exportation in China are Dropping !
Exports of the world’s largest trading power in the past year reached $ 2.1 trillion and imports 1.590 billion, the Customs administration said Friday, a trade surplus of $ 510 billion.
“There are still obstacles to China’s foreign trade,” Customs spokesman Huang Songping told a press conference that the international trading environment is “austere and complex”.
In December alone, exports fell by 6.1% year-on-year to $ 209.4 billion. Imports, meanwhile, climbed 3.1% to $ 168.6 billion. The Chinese trade surplus was thus $ 40.8 billion.
The drop in exports for last month is much more pronounced than expected by a panel of experts surveyed by the financial agency Bloomberg (-4%). Imports increased according to their forecast (+ 3%).
Customs statistics are carefully scrutinized by markets to gauge the health of the Chinese economy: foreign trade remains a pillar of China’s GDP and a traditional engine of growth.
The situation remains precarious: industry in China is still plagued by massive overcapacities; The surge in indebtedness; Growth only resists thanks to an alarming bubble in the real estate sector.
Chinese governement is reacting
The Chinese government is trying to rebalance the country ‘s growth model towards services, new technologies and domestic consumption, to the detriment of heavy industries and – indeed – low value – added exports. But the transition is painful.
Exports had grown by 0.1% over one year in November to $ 196.8 billion. The start was shy but this stabilization proved auspicious after seven months of withdrawal.
Their decline in December comes despite signs of a recovery in global demand, a trend reflected in positive figures in neighboring economies in Taiwan and South Korea, Julian Evans-Pritchard of Capital Economics.
This is worrying “given that the current situation of rising prices and relatively robust growth of the global industry should have been a support for Chinese trade,” he said.
“In the future, it is difficult to see what could lead to a more meaningful recovery of Chinese trade,” Evans-Pritchard said.
The share of trade in China’s GDP fell from 66 percent in 2006 to 40.7 percent in 2015, according to the World Bank, but remains a key growth engine.
The Risk “Trump” anti China
The prospect of severe tensions with the United States (2nd trading partner of Beijing after the European Union) could also plague the trade of China. source
US President-elect Donald Trump promised to impose a prohibitive tax of 45 percent on Chinese imports. He also appointed for the head of the US National Trade Council an economist notoriously hostile to Beijing.
The posture of the republican billionaire vis-à-vis the Chinese trade “could lead to a structural weakness in the long term for Chinese exports,” worried Friday the bank ANZ.
Trump encourage US companies to relocate their production
“Trump’s trade policy is likely to encourage US companies to relocate their production sites outside of China, even though its efforts to promote high-end production could offset some of the losses.” more information http://darxtar.org/manufacture-in-us-for-chinese-companies-a-new-trend.html
In the face of American isolationist Donald Trump and hoping in particular to stop the fall of its foreign trade, China is now a champion of free trade. President Xi Jinping is expected to defend his vision of a “more inclusive globalization” Tuesday at the World Economic Forum in Davos, a few days before taking office of Mr. Trump.