Traditional Dancing -Photo by Government of China

JAKARTA (TheInsiderStories) China‘s trade surplus with the United States (US) fell to US$26.62 billion in October, down from US$28.08 billion in September, the Customs Department announced on Wed. 8, 2017, ahead of United States‘s President Donald Trump’s visit to the country.

Overall, China’s October exports lagged market expectations, rising just 6.9 per cent from a year earlier, while imports beat forecasts, growing 17.2 per cent.

Those numbers still managed to defy market expectations of a sharper slowdown this year, as a government-backed construction boom drove up prices from cement to steel and glass in an artificial boost to overall economic output.

October data is again expected to show growth that will easily hit Beijing’s 6.5 per cent target for 2017, as surging profits see factories expanding output, albeit at a slower pace, and resilient consumer spending supporting broad activity.

Policymakers could face a delicate balancing act over the next year, analysts say, as they target high-risk lending to firms and the property sector, while taking long-overdue steps to bring polluting factories to heel.

Trump has railed against China’s massive trade surplus with the U.S., and bilateral trade is set to feature prominently in discussions. China’s trade surplus with the U.S. in September was the highest ever for any single month, even as its overall surplus narrowed.

Trump wants to narrow China’s trade surplus with the United States, which stood at $347 billion in 2016, but he has yet to reveal as to what he might propose to the Chinese this week.

The U.S government has raised duties on selected Chinese goods, including stainless steel and plywood, to offset what it says are improper subsidies, and is investigating whether Beijing strong-arms foreign companies to hand over proprietary technology.

Some American companies are concerned that Trump’s narrow focus on trade in goods might signify that he pays too little attention to other issues, such as Chinese rules that limit their presence in finance, health care and other service industries.

Chinese officials have rejected U.S. accusations that China engages in predatory policies at the expense of its neighbors.

As Trump continues his tour around Asia, traders should expect a degree of escalation in rhetoric towards North Korea. So far, on his visit to South Korea, Trump has maintained a firm stance against the isolated regime, while also striking a conciliatory note if North Korea takes steps backward on its nuclear program.

Written by Elisa Valenta, email: elisa.valenta@theinsiderstories.com