Trade wars burden in China data pull markets down

Trade wars burden in China data pull markets down

Trade wars burden in China data pull markets down

The long awaited talks between officials of United States and China are likely to happen next week as both nations have had tough time maintaining trade equilibrium after they imposed trade tariffs on each other.

United States officials were in Beijing last week for talks aimed at ending the bruising trade confrontation that has subjected more than $350 billion in two-way trade to steep tariffs.

As Trump has pressed Beijing to increase imports of U.S. goods, China's trade surplus with the United States hit a record a year ago of $323.3 billion, an 11 percent increase over 2017, according to Chinese customs data released Monday.

United States tariffs on Chinese goods have put additional strains on China's already cooling economy, prompting policymakers in Beijing to announce a series of growth-boosting measures to avert the risk of a sharper slowdown.

Beyond the tariffs battle with the U.S., China's economy has been facing its own domestic headwinds.

"Significant uncertainty remains as to whether there could be a "deal" after March 1", Citigroup Inc economists led by Liu Ligang wrote in a note. The trade war was initiated by President Trump on receiving complaints from trade bodies in U.S. about unfair trade practices of Chinese manufacturers.

China's overall trade surplus for 2018 was $351.76 billion, the government said.

The surplus with the USA is a major source of anger within the Trump administration, which imposed tariffs on hundreds of billions of dollars worth of Chinese goods previous year and has warned of more to come.

China could use large purchases of U.S. goods, promises of long-term dialogue on structural changes to its economy and active cooperation on infrastructure projects to fashion a short-term compromise that would satisfy the United States and avoid a further escalation of the trade war, an American specialist on Japan said on Monday. For all of 2018, soybean, the second largest imports from the USA, fell for the first time since 2011.

Russia-China trade turnover has grown significantly over recent years.

China's widening trade surplus is likely to provide ready ammunition to those in the Trump administration who say that the tariff pressure campaign needs to be sustained to get Beijing to correct what the US sees as unfair trade practices.

Chinese policymakers are widely expected to roll out more support measures in coming months if domestic and external conditions continue to deteriorate.

But a slew of bad economic data has added to concerns about China's economy, which is expected to have eased to around 6.5 per cent growth in 2018, down from 6.9 per cent in 2017.

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