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China November trade rises in sign of global pick-up but Trump clouds 2017

BEIJING — China’s exports grew in November for the first time in nine months while imports also rose, fuelled by its strong thirst for commodities from coal to iron ore, reflecting a pick-up in both domestic and global demand.

China’s exports rose 0.1 per cent last month, an improvement over October’s 7.3 per cent contraction. Photo: Chinatopix via AP

China’s exports rose 0.1 per cent last month, an improvement over October’s 7.3 per cent contraction. Photo: Chinatopix via AP

BEIJING — China’s exports grew in November for the first time in nine months while imports also rose, fuelled by its strong thirst for commodities from coal to iron ore, reflecting a pick-up in both domestic and global demand.

Demand from all of China’s major trading partners improved significantly, especially Europe and the United States, though shipments to emerging economies remained weak.

The upbeat data adds to signs of a modest industrial recovery in the world’s largest economies, even as China and other Asian exporters brace themselves for a potential trade war once protectionist US President-elect Donald Trump takes office.

“The improvement reflects a strengthening in global demand, with recent business surveys suggesting that developed economies are on track to end the year on a strong note,” Mr Julian Evans-Pritchard, China economist at Singapore-based Capital Economics, said in a note.

“But while global demand has recovered somewhat recently, lower trend growth in many developed and emerging economies means that further upside is probably limited.”

Exports rose 0.1 per cent to US$196.8 billion (S$280 billion), an improvement over October’s 7.3 per cent contraction, customs data showed yesterday. Imports rose 6.7 per cent to US$152.2 billion, up from the previous month’s 1.4 per cent decline.

November’s trade figures cement expectations that China’s government will once again meet its full-year growth target, which this year was set at 6.5 to 7 per cent. Growth in the world’s second-largest economy held steady at 6.7 per cent over a year earlier in the quarter ending in September, shored up by twin booms in credit and real estate sales.

But the world’s largest trading nation could be heavily exposed to protectionist measures next year if Mr Trump follows through on campaign pledges to brand it a currency manipulator and impose heavy tariffs on imports of Chinese goods.

South Korea and Taiwan are worried, too. Both also reported stronger-than-expected exports in November.

China is squarely in Mr Trump’s sights. Its trade surplus with the US has widened steadily over the past years, expanding 6.5 per cent to US$367.11 billion in 2015, US Census Bureau data showed.

Even if Mr Trump does not try to impose punitive measures, growing protectionist sentiment could have a chilling effect on trade and investment worldwide.

“We remain cautious on the export outlook, given the still unconvincing global demand recovery and policy uncertainty in the US after Mr Trump’s election win,’’ said Mr Louis Kuijs of Oxford Economics in a report.

The chief of China’s sovereign wealth fund said yesterday he expected Mr Trump to be very careful in considering whether to increase tariffs in line with his election promises because it would not be in US interests. The US is China’s largest trading partner.

November’s trade gains were even stronger when measured in China’s currency, which has weakened against the dollar. In yuan terms, exports rose 5.9 per cent from a year earlier while imports jumped 13 per cent.

Still, despite the latest improvement, exports for the first 11 months of the 2016 are down 7.5 per cent from a year ago. In 2015, exports fell 2.8 per cent for the full year.

“We would not think of the positive (China) numbers as an inflection point. Of all the high frequency economic data over the year, trade headwinds are likely to be the most severe, and the most uncontrollable, due to trade policies of other countries,” said Mr Chester Liaw, an economist at Forecast Pte Ltd in Singapore.

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