research Market Intelligence /marketintelligence/en/news-insights/research/china-wins-the-trade-battle-in-may-looks-for-new-weapons content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *

* Required

In This List

China Wins The Trade Battle in May, Looks For New Weapons

Cable Nets For Kids Enjoy Wide Carriage On Skinny Bundles

Energy

Power Forecast Briefing: Fleet Transformation, Under-Powered Markets, and Green Energy in 2018

Street Talk Episode 50 - Challenging The Legacy Core Bank Providers

Fed Poised To Relax Key Rules For Large Banks


China Wins The Trade Battle in May, Looks For New Weapons

China's international trade activity fell 3.4% year over year in May, largely due to an 8.5% slump in imports, Panjiva analysis of official figures shows. The drop in imports was the worst since Jul 2016 and brought the three month average change in imports to a 4.2% decline following a 1Q decline of 4.7%.

That bodes ill for China's main trading partners. Export growth remained volatile however with a modest 1.1% increase in May - better than the "modest decline" expected by analysts according to Reuters - following a 2.7% drop previously.

Learn more about Panjiva Supply Chain Intelligence
Click Here

EXPORT GROWTH MARGINAL AND VOLATILE

Chart segments Chinese trade by direction. Calculations based on China General Customs Administration figures. Source: Panjiva

There is some evidence for a subset of exporters rushing shipments to increase tariffs, as outlined in Panjiva's research of May 10, given exports to the U.S. only fell 4.2% year over year compared to 12.9% in the prior three months. Imports from the U.S. continued their precipitous descent with a 26.8% decline.

That meant exports to the U.S. fell $1.63 billion while imports fell $3.95 billion - from a trade deficit perspective the U.S. "lost" the May trade battle on its own measure. The trade surplus of $26.9 billion was 9.4% higher than a year earlier.

NEW PRE-TARIFF RUSH NEARLY BEATS OLD TARIFF DRAG

Chart segments Chinese trade with the U.S. by direction. Calculations based on China General Customs Administration figures. Source: Panjiva

Exports to the U.S. may begin to slow as a result of retaliatory measures outside of tariff driven measure. Total Chinese exports of rare earths fell 18.4% - while that supports reported government threats to cut shipments it continues a downturn of 11.2% in the prior three months.

Export limitations may widen. Xinhua reports that the National Development and Reform Commission (NDRC) will consider a “national technological security management list system” to restrict a broad range of technology exports - likely supply chain related - to the U.S.

There will need to be a careful balancing act there given high tech products including semiconductors have been supporting growth. Exports of semiconductors rose 12.3% year over year in May, without them total exports would have risen by 0.7% not 1.1%.

RARE EARTH DECLINE CONTINUES, SEMIS SLOW SOMEWHAT

Learn more about Panjiva
Request Demo