China's trade surplus with the United States grew in 2018 but tariffs bite

China's 2018 trade surplus with U.S. highest on record going back to 2006

China's 2018 trade surplus with U.S. highest on record going back to 2006

Although factory output declined in December, total Chinese trade previous year increased by 12.6% compared with 2017 to stand at $4.6tn (£3.6tn).

China's trade surplus with the U.S. widened past year, while the country's imports and exports fell in December as the trade war begins to bite in the world's second biggest economy.

The dismal December trade readings suggest China's economy may have cooled faster than expected late in the year, despite a slew of growth-boosting measures in recent months ranging from higher infrastructure spending to tax cuts.

China's politically sensitive trade surplus with the United States surged to a record $323.3 billion in 2018 as a tariff battle with Washington intensified.

The deceleration of exports adds to pressure on Beijing to resolve its costly tariff battle with Washington over Chinese technology ambitions.

With US tariffs in place, the gloomy export picture has reinforced the need for Beijing to rely on its legion of consumers to grow its economy.

The OECD said its composite leading indicators, gauges of economic activity that are created to anticipate turning points relative to past performance for between six to nine months ahead, also showed easing growth momentum in the US, Germany, Canada, Italy and the euro area as a whole.

Total imports of soybeans fell 7.9 percent last year to 88 million tonnes, customs data showed, with December imports down 40.1 percent from a year earlier.

Fears have been mounting over the health of the world economy for several months as the US-China trade dispute serves as a handbrake on global trade.

ING said a fall in electronic shipments could be related to foreign companies avoiding using China-made electronic components, adding that exports and imports of electronic parts and goods will likely shrink this year.

Traditionally China imports vast quantities of American soybeans in the second half of the year, long making it the most valuable import from the US.

The higher tariffs China levied on United States supplies also hit overall import growth.

"The import slowdown is consistent with other signs that growth in China's domestic economy continued to weaken", said Louis Kuijs, head of Asia economics at Oxford Economics.

Sources told Reuters last week that Beijing is planning to lower its economic growth target to 6-6.5 per cent this year after an expected 6.6 per cent in 2018, the slowest pace in 28 years.

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