China's trade buoyant in 2017 with both imports and exports rising

China's foreign trade expanded last year for the first time in three years supported by global economic recovery and higher commodity prices, official data showed today.

China’s foreign trade expanded last year for the first time in three years supported by global economic recovery and higher commodity prices, the General Administration of Customs said today.

China's import and export volume rose 14.2 percent year on year to 27.79 trillion yuan (US$4.28 trillion) in 2017, ending the previous two years' continuous drop, the official data showed.

The exports increased 10.8 percent to reach 15.33 trillion yuan while imports surged 18.7 percent to 12.46 trillion yuan.

The trade surplus continued to narrow last year, shrinking 14.2 percent to 2.87 trillion yuan, compared with a 9.1-percent reduction registered in 2016.

In December alone, imports in yuan terms rose 0.9 percent year-on-year, slower than the 15.6 percent in November and missing market expectations for 11.8 percent.

Exports last month grew 7.4 percent year-on-year, compared with November’s 10.3 percent and market expectations for 6.7 percent.

Huang Songping, spokesman of the Customs, attributed the strong growth last year to recovery of external demand, stable and positive domestic economic growth, higher prices of commodities, tighter economic link with emerging markets under the Belt and Road Initiative, and a low base in 2016.

He said that growth has been slower in the latter part last year but the outlook is still rosy.

“China could maintain growth in trade this year with improved quality,” Huang said. “But the double-digit pace is difficult to be sustained.”

He cited complicated geopolitical conditions, competition from emerging markets, and renewed protectionism as major factors that will add to uncertainties and instability of China’s foreign trade.

Today’s data also revealed falling confidence and new orders in December, indicating pressure in the first quarter.

The European Union, the United States and ASEAN are the top three trading partners of China.

China’s total trade with the US expanded 15.2 percent last year to 3.95 trillion yuan, accounting for nearly 15 percent of China’s foreign trade.

Exports to the US climbed 14.5 percent while imports from the country jumped 17.3 percent.

Still, trade surplus with the US rose 13 percent year on year to a decade-record of 1.87 trillion yuan.

Australia and New Zealand Banking Group said trade conditions are sound for China to make policies, but short-term risks may occur.

“China’s trade outperformed in 2017, ending two-years’ contraction, thanks to recovering demand both domestically and abroad,” said Betty Wang, ANZ’s senior China economist. “With a much better trade performance and a steady outlook, concerns about the impact of foreign exchange policy on China’s exports may take a back seat.”

She said that uncertainty surrounding Sino-US trade ties might be a key potential down side risk in the near term, with the potential investigation into China’s intellectual property practices and export of steel and aluminium.

“We cannot exclude the possibility of the US taking unilateral actions on Chinese exports in specific sectors,” Wang said. “Even though a broad-based bilateral trade war is still highly unlikely in 2018.”

Earlier official data showed China’s consumer inflation cooled last year while factory gate prices rose for the first time in six years amid stable economic growth.

Chinese Premier Li Keqiang yesterday said the country’s whole-year GDP growth may reach 6.9 percent last year, above official target and market expectations.

The NBS is due to release 2017 GDP growth next Thursday.

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