China's trade surplus widened to US$50.98 billion in June 2019, up 24.6 percent from the same month last year of $40.91 billion - Photo: AP.

JAKARTA (TheInsiderStories) – China’s trade surplus widened to US$42.81 billion in October of 2019 from $32.97 billion in the same month a year earlier, the customs office data showed Friday (11/08). This was the largest trade surplus since July, as exports declined 0.9 percent year-on-year, while imports dropped at a faster 6.4 percent.

The data showed exports from China dropped by 0.9 percent year-on-year in October, compared to market estimates of a 3.9 percent decline and after a 3.2 percent fall in September. This was the third straight month of yearly decline in overseas sales, amid weakening global demand and ongoing trade dispute with the United States (US).

In detail, sales contracted for refined products (-44.6 percent), steel products (-81.4 percent to 1.03 million tonnes), unwrought aluminium and products (-10.6 percent to 431,000 tonnes), coal (-29.6 percent to 0.34 million tonnes), and coke & semi-cole (-67.8 percent to 0.27 million tonnes).

In contrast, exports of crude oil surged 321,77.3 percent to 45.51 million tonnes. Also, sales grew for rice (34.2 percent to 251,000 tonnes), the data showed.

On the opposite, imports contracted 6.4 percent, less than consensus of an 8.9 percent fall and following an 8.5 percent decline in September. This was the seventh consecutive month of the yearly drop in imports.

The weak import figures are in line with recent readings on shrinking factory activity and bleak producer prices. The slowdown points to lingering weakness in domestic demand and the limited impact of policy stimulus so far.

The data also showed China’s trade surplus with the US increased to $26.42 billion in October from $25.88 billion in September. Considering the first ten months of the year, the trade surplus with the US was recorded at $247.74 billion.

For the January-October period, the trade surplus increased to $341.41 billion from $249.46 billion in the corresponding period the prior year, the data showed.

The data providing some relief for the export-reliant economy as Beijing tries to reach a partial trade deal with Washington. Both sides said on Thursday have agreed to roll back tariffs on each other’s goods in phases.

The Chinese commerce ministry, without laying out a timetable, said the two countries had agreed to cancel the tariffs in phases. In what could be another gesture to boost optimism, China’s state news agency Xinhua reported late on Thursday that the Chinese customs and ministry of agriculture are considering removing restrictions on US poultry imports.

As known, US President Donald Trump has used billions of dollars in tariffs on Chinese goods, as his main weapon in the trade war between the world’s two largest economies. China’ ministry of commerce spokesman Gao Feng, said that China and the US have agreed to roll back some of the tariffs.

He asserted, if negotiators reach a phase one agreement in trade talks, then both the US and China should reduce the tariffs by the same amount and at the same time. On Wednesday, the US’ commerce secretary of Wilbur Ross optimistic a “phase one” trade agreement to be signed by Trump and Chinese President Xi Jinping before the end of the year.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com