China’s trade with US sinks in November

Weaker Chinese demand has global repercussions, depressing demand for industrial raw materials from other Asian economies and oil from Brazil and Australia. (AFP/File)
Updated 08 December 2019

China’s trade with US sinks in November

  • The dispute has disrupted global trade in goods from soybeans to medical equipment and threatens to depress economic growth

BEIJING: China’s trade with the US sank again in November as negotiators worked on the first stage of a possible deal to end a tariff war.

Exports to the US fell 23 percent from a year earlier to $35.6 billion, customs data showed Sunday. 

Imports of American goods were off 2.8 percent at $11 billion, giving China a surplus with the US of $24.6 billion.

Exports to some other countries including France rose, helping to offset the loss.

China’s global exports were off 1.1 percent from a year earlier at $221.7 billion despite weakening worldwide demand. Imports were up 0.3 percent at $183 billion, giving China a global surplus of $38.7 billion.

Hopes for a settlement to the fight over Beijing’s technology ambitions and trade surplus rose after President Donald Trump’s announcement of a “Phase 1” agreement following talks in October. But there has been no sign of agreement on details nearly two months later.

The dispute has disrupted global trade in goods from soybeans to medical equipment and threatens to depress economic growth.

Trump put off a tariff increase in October but penalties already imposed by both sides on billions of dollars of imports stayed in place. Another US increase is due on Sunday on $160 billion of Chinese goods. That would extend penalties to almost everything Americans buy from China.

Chinese spokespeople have expressed hope for a settlement “as soon as possible,” but Trump spooked financial markets last week by saying he might be willing to wait until after the US presidential election late next year.

Financial markets have repeatedly risen on optimism about the talks only to fall back when no progress is announced.

The “Phase 1” agreement doesn’t cover contentious issues including US complaints that Beijing steals or pressures companies to hand over technology. Economists warn tensions could rise again next year and the bulk of tariff hikes are likely to stay in place for some time.

For the first 11 months of 2019, China’s total global exports were off 0.3 percent at $2.3 trillion despite the tariff war. Imports were down 4.5 percent at $1.8 trillion, adding to signs Chinese domestic demand is cooling.

China’s exporters have been hurt by the US tariff hikes but its overall economy has been unexpectedly resilient. Growth in the world’s second-largest economy slipped to 6 percent over a year earlier in the three months ending in September, down from the previous quarter’s 6.2 percent but still among the world’s strongest.

Weaker Chinese demand has global repercussions, depressing demand for industrial raw materials and components from other Asian economies and oil, iron ore and other commodities from Brazil, Australia and other suppliers.

The Ministry of Finance announced Friday that China was waiving punitive import duties on US soybeans, keeping a promise announced in September.

A sticking point is Beijing’s insistence that Washington roll back its most recent penalties on Chinese goods as part of the “Phase 1” deal. Beijing said last month the US side agreed, but Trump dismissed that.

A Chinese spokesman repeated Thursday that Beijing expects such a move in a “Phase 1” agreement.


Saudi Arabia calls ‘urgent’ meeting of oil producers

Updated 02 April 2020

Saudi Arabia calls ‘urgent’ meeting of oil producers

  • Crude prices jump after move, which Kingdom says is part of efforts ‘to support global economy in these exceptional circumstances’

DUBAI: Saudi Arabia has called an urgent meeting of the Organization of Oil Exporting Countries and other oil exporters, to discuss restoring the “desired balance” in global energy markets.

The move — which prompted a big jump in the price of oil on global markets — is part of the Kingdom’s “constant efforts to support the global economy in these exceptional circumstances, and in appreciation of the request of the President of the USA, Donald Trump, and the request of friends in the USA,” according to a statement published by the official Saudi news agency.

Global oil prices reacted immediately. Brent crude, the Middle East benchmark, increased by 20 percent, taking it back above $30 a barrel.

The price of crude has been under pressure as a result of collapsing demand due to the coronavirus crisis, and Saudi Arabia’s determination to win market share from American and Russian producers.

During an OPEC meeting in Vienna last month, the Kingdom offered to implement further cuts in oil production but Russia refused to participate.

“Saudi Arabia would like to underscore its efforts during the past period to restore balance in the oil market, as it drew support for that from 22 counties of the OPEC+, but it was not possible to reach an agreement or get consensus,” according to the official Saudi statement.

Oil industry expert Daniel Yergin said: “This represents a recognition of how much the world has changed for oil in a single month as demand falls away so dramatically, and the impact of Donald Trump becoming personally engaged.”

The Saudi call for talks came after a hectic round of communications between the US, Russia and the Kingdom.

In a message posted on Twitter after the Saudi announcement, Trump wrote: “I just spoke to my friend Mohammed bin Salman, crown prince of Saudi Arabia, who spoke with President Putin and I expect and hope that they will be cutting back approximately 10m barrels, and maybe substantially more, which will be great for the oil and gas industry.”

However, officials in Riyadh downplayed any suggestion of a commitment to specific reductions in the levels of oil output. There is no indication yet of when the “urgent” meeting of OPEC and others might happen, nor what will be on the agenda, they said.

President Vladimir Putin denied that he had spoken to the crown prince about the price of oil. Novosti, the official Russian news agency, said there was no such conversation, but added that the president had discussed falling oil prices with other OPEC members and with the US.

“The Americans are worried because of their profitability for shale oil production,” said Putin. “This is also a difficult test for the American economy.”

This week, Saudi Arabia produced more oil in a single day than at any time in its history, with 12 million barrels flowing from pumps at Saudi Aramco, the world’s biggest oil company.