China ramps up imports from US as trade deal target looms

[SHANGHAI] China ramped up purchases of American goods in September as its economy strengthened, though it still remains far from the full-year target set out under its Phase One trade deal with the US

The monthly value of US goods that China bought under the trade agreement reached a monthly record high of US$9.9 billion in September as oil, soybean and car imports surged. That still leaves China's purchases at only 38.5 per cent of a total target of more than US$170 billion for the year, according to Bloomberg calculations based on Customs Administration data.

Under the agreement signed in January, China promised to buy an additional US$200 billion of US goods and services over the 2017 level by the end of 2021. The coronavirus pandemic upended some of those plans as demand crashed in the first quarter, but China's recovery since then is gaining momentum, with imports gradually accelerating.

Purchases of US energy goods jumped about 75 per cent in September from the previous month as China imported a record amount of crude oil. The increase could reflect rising demand for cheaper US oil and supplies for heating as winter approaches.

The value of agricultural goods bought from the US climbed about 60 per cent, with imports of soybeans surging more than 600 per cent. Cotton also jumped, possibly due to China seeking to rebuild state reserves as demand from the nation's textile industry is showing signs of recovery.

The customs data showed China had bought 35.35 per cent of the American farm goods it agreed to buy under the trade deal in 2020, in contrast to a US government statement last week saying purchases stood at US$23 billion, or 71 per cent of the target. The latter includes goods that have been shipped, as well as those sold but not yet exported by the US.

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China's purchases of vehicles from the US surged last month, boosting overall manufactured imports and reflecting a pickup in consumer confidence. Purchases of integrated circuits remained steady in the month.

BLOOMBERG