China's trade surplus with US jumps, global imports surge

Beijing

CHINA'S trade surplus with the United States jumped in May, official data showed Friday, worsening the imbalance at the centre of tensions between the economic titans while Beijing's advantage with the rest of the world shrank.

The figures may reinforce Washington's determination to move forward with new tariffs on tens of billions of dollars of Chinese imports as early as next week.

Beijing has warned those tariffs would void agreements made between the two powers over months of trade negotiations between the world's two largest economies.

The record imbalances are at the heart of US President Donald Trump's anger at what he describes as Beijing's unfair trade practices that are hurting American companies and destroying jobs.

Trade is also expected to dominate upcoming G7 talks - which do not include China - with Canada and leading European nations warning Mr Trump they will not back down over tariffs.

For the first five months of the year, China's surplus with the US crossed the US$100 billion mark, hitting US$104.8 billion. Customs data showed the surplus grew 11.7 per cent on-year to US$24.6 billion in May, with exports to the US rising by about 12 per cent and imports up 11 per cent.

With the wider world, Chinese demand has outpaced its shipment growth, with its surplus of US$24.9 billion for the month down 38.9 per cent from last year. China's exports grew 12.6 per cent in May while imports jumped 26 per cent on-year, outpacing forecasts of 11.1 per cent growth and 18 per cent respectively, by analysts pooled by Bloomberg.

"The particularly strong May figures are due to uncertainties from the trade negotiations," said Iris Pang, an economist at ING Groep NV in Hong Kong.

"Export risks are mounting, so the exporters expedited importing components for re-export."

On Thursday in Washington, the US announced it had reached a deal with Beijing to ease sanctions that brought Chinese smartphone maker ZTE to the brink of collapse, a possible indication of progress in fraught trade talks.

The ZTE settlement came just days after Beijing reportedly offered to ramp up purchases of American goods by US$70 billion to help cut the yawning trade imbalance with the United States - moving part-way towards meeting a major demand of Mr Trump. The US leader has demanded a US$200 billion reduction in its trade deficit with China over two years.

Despite the settlement, there was no sign Mr Trump had veered from plans to impose as much as US$50 billion in tariffs on Chinese imports to punish Beijing for its alleged theft of American technology and know-how. AFP