Published: Sat, October 13, 2018
Markets | By Josh Butler

China trade surplus with USA widens to record $34.1 billion

China trade surplus with USA widens to record $34.1 billion

But they also benefit from "robust US demand" and a weaker Chinese currency, which makes their goods cheaper overseas, Louis Kuijs of Oxford Economics said in a report.

Despite the rhetoric, Trump and Chinese President Xi Jinping plan to meet at the G20 summit in Argentina in late November, the Wall Street Journal reported on Thursday, citing officials in both countries. Analysts had expected imports to rise 15.0 percent, compared with August's 19.9 percent.

In his comments in Bali, Mnuchin did not say what the forthcoming Treasury report, set to come out next week, will conclude about China's currency practices.

China's trade surplus with the United States surged to a record high of $34.13 billion in September, compared with $31.05 billion in August, Chinese customs data showed on Friday.

The September surplus with the US was larger than China's overall trade surplus for the month.

But global trade would continue to face challenges as the U.S.

Concerns have been raised that China, the largest foreign holder of U.S. Treasury bonds, might start dumping its holdings as a way to bring more pressure on the United States in the trade dispute. However, some speculate that China, instead of continuing to match tariffs (in which case it will run out of options first), might hit the USA in a more significant way: by selling its hoard of U.S. securities, worth $1.17 trillion.

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Yi told an investment audience on Thursday that China's monetary policy was on an opposite cycle to that of the Federal Reserve, which has been raising rates amid a strong economy, people who attended the closed-door session said.

China's overall trade - what it buys and sells with all countries including the United States - logged a $31.7bn surplus, as exports rose faster than imports.

In an interview on "Fox & Friends", Trump said his slapping billions of dollars of tariffs on Chinese goods has forced them to try to make a deal.

Washington has long argued that China keeps its currency artificially low to make its exports more competitive but in recent years the yuan or renminbi (RMB) has strengthened and is viewed by economists as more in line with fundamentals.

"The way the USA has structured the tariffs encourages frontloading because firms that know they're going to hit with tariffs would rather pay 10 percent than 25 percent", he said.

The IMF has also lowered estimates for the United States and the global economy as a whole.

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