JAKARTA (TheInsiderStories) – 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. This is the biggest trade surplus since December last year, the Customs Department announced on Monday (07/15).
However, China’s export performance declined slightly in all products except rice exports, while China’s increasing domestic demand made imports of the second-largest economy also declined sharply, except for imports of crude oil and coal.
This coal imports increased along with the Chinese government’s policies that began to limit the supply of domestic coal production and began to focus on developing renewable energy.
Exports from China fell 1.3 percent to $12.84 billion in June (YoY), compared to market expectations of a 2 percent decline. It was the first full month of higher United States (US) tariffs on Chinese goods worth $200 billion, which was carried out several weeks earlier. Meanwhile, the two countries agreed to restart negotiations amid fears that ongoing trade tensions are weighing on global growth.
Aluminum and forged aluminum products fell 0.8 percent to 506,000 tons and fell 5.6 percent from 536,000 tons in May. In addition, exports of coke and semi-coke fell by 60.1 percent to 0.38 million tons and by 56.5 percent from May 0.88 million tons.
On the other hand, steel product exports fell 23.6 percent to 5.31 million tons while coal fell 5.9 percent to 0.33 million tons. Land exports rarely dropped 27.3 percent from a year ago. In contrast, rice exports surged 81.7 percent to 298,000 tons, but 13.1 percent lower than 343,000 tons in May.
Among China’s biggest trading partners, China’s exports fell the most with US rivals by 7.8 percent. But its exports rose to ASEAN (12.8 percent), Taiwan (5 percent), South Korea (2.9 percent) and Japan (2.4 percent).
Meanwhile, amid further domestic demand, imports fell 7.3 percent from a year earlier to $161.86 billion in June, far worse than the estimated 4.5 percent decline.
Purchases of forged copper fell 27.2 percent to 326,000 tons in June and fell 9.7 percent from May to 361,000 tons. Also, iron ore imports fell 9.7 percent to 75.18 million tons, down 10.2 percent from the previous month.
In addition, soybean shipments plunged 25.1 percent to 6.51 million tons and fell by 11.5 percent from May, amid higher tariffs on US cargo and after the outbreak of African swine fever. In contrast, the increase was seen in crude oil imports (up 15.2 percent to 39.58 million tons) and coal (up 6.4 percent to 27.10 million tons).
With the US, China’s trade surplus with the US rose 11 percent to $29.92 billion in June from $26.9 billion in May. For the January-June combined, the country’s trade surplus with the US widened 5 percent to $140.48 billion from $133.76 billion (YoY).
China’s imports from the US slumped 31.4 percent in June from a year earlier, following a decline of almost 27 percent in May. Its exports to the US fell 7.8 percent sharper in June, compared with a 4.2 percent decline in May.
The two countries’ exports were followed after a higher US tariff policy on Chinese goods worth $200 billion, which Washington announced a few weeks earlier after trade talks between the world’s biggest economies failed.
Although both sides agreed at the end of June to resume negotiations, and the US said it would postpone additional levies, the existing rates still apply, and this would increase the risk of longer and more expensive battles that would weigh heavily on the global economy.
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