Despite a worsening tariff war, China’s trade surplus with the United States has widened to a record $34.1bn in September.
Chinese exports to the American market rose by 13 percent over a year to $46.7bn, down from August’s 13.4 percent growth, customs data showed on Friday.
Imports of American goods increased 9 percent to $12.6bn, down from 11.1 percent.
Relations between the world’s two largest economies soured sharply this year, with US President Donald Trump vowing on Thursday to inflict economic pain on China if it does not blink.
The two countries imposed new tariffs on a massive amount of each other’s goods mid-September, with the US targeting $200bn in Chinese imports and Beijing firing back at $60bn worth of US goods.
Chinese exports to the US have at least temporarily defied forecasts they would weaken after being hit by punitive tariffs of up to 25 percent in a fight over American complaints about Beijing’s technology policy.
“Exports continued to defy US tariffs last month but imports struggled in the face of cooling domestic demand,” said Julian Evans-Pritchard of Capital Economics in a report.
“We expect both to soften in the coming quarters,” he said.
China’s trade surplus with the US grew 10 percent in September from a record $31bn in August, according to China’s customs administration – a 22 percent jump from the same month last year.
China’s overall trade – what it buys and sells with all countries including the US – logged a $31.7bn surplus, as exports rose faster than imports.
While the data showed China’s trade remained strong for the month, analysts forecast the trade war will begin to hurt in the coming months.
Analysts say a sharp depreciation of the yuan has also helped China weather the tariffs by making its exports cheaper.
The yuan has lost nearly 10 percent of its value against the US dollar this year. That prompted suggestions Beijing might weaken the exchange rate to help exporters, but that might hurt China’s economy by encouraging an outflow of capital.
US Treasury Secretary Steven Mnuchin – in comments published in the Financial Times this week – warned China against engaging in competitive currency devaluations.
China has steadfastly denied that it has manipulated the yuan to cope with the tariffs. The US dollar has strengthened against a range of currencies this year as American interest rates have risen.
China’s stock market has plunged this year but the trade war has also started to erode Trump’s oft-touted US stock gains, with the Dow Jones Industrial Average down more than five percent for the week.
The International Monetary Fund this week cited the trade war as it lowered its 2019 growth forecast for China, which is set to see its slowest expansion since 1990.
The IMF also lowered estimates for the United States and the global economy as a whole.