Trade war, day 126: China talks up G20 meeting as exports surge

Domestic News

The planned meeting between Xí Jìnpíng 习近平 and Donald Trump in Buenos Aires on the sidelines of the G20 summit is still weeks away, but the Chinese side is already stressing its importance.

  • Beijing’s top diplomat, State Councillor Wáng Yì 王毅, told reporters that the talks “will be of great significance for both sides to manage differences effectively and resolve issues in a practical way,” adding that it “will help chart the course for China-U.S. relations.”
  • In Washington, Politburo member Yáng Jiéchí 杨洁篪 met with National Security Adviser John Bolton and told him that “both sides have to work out an acceptable solution through negotiations on an equal and mutually beneficial basis,” and emphasized that they “carefully prepare to ensure positive results in the Argentina meeting.” Yang, along with Defense Minister Wèi Fènghé 魏凤和, will begin a high-level security dialogue with top U.S. officials on Friday.
  • Xi Jinping himself sent a rather conciliatory message to Trump in a meeting with Henry Kissinger in Beijing, stating, “China is committed to working with the US to achieve a non-confrontational, without conflict, and mutually respectful cooperation in which both sides win.” However, according to the SCMP, “Beijing was keen to hear Kissinger’s advice on how to avoid further escalating tensions, but it was unclear how the veteran diplomat could influence the Trump administration’s China policy.”
  • In October, Chinese exports surged much higher than anticipated. In the first full month since $200 billion in new U.S. tariffs were imposed, exports were up 15.6 percent year-on-year and grew at a faster pace than in September, when exports rose by 14.5 percent. The median forecast was only around 11.7 percent. Imports also beat expectations with a 21.4 percent increase over the previous year.
  • Among the reasons for the uptick:
    • “Front-loading” through the end of this year, as American buyers anticipate higher tariff rates of 25 percent in 2019, up from the current 10 percent.
    • Strong demand globally: “It’s not just the U.S., wherever you look, especially the emerging markets, demand is solid,” Liu Yaxin, an economist at China Merchants Securities, told the WSJ (paywall).
    • The weaker yuan, which fell 11.4 percent against the U.S. dollar, making Chinese goods relatively cheaper.
    • Assistance from Beijing: Reuters notes that this includes “increasing export tax rebates and pledging more support to private firms.”

Other trade-war-related news:

Previously in SupChina’s trade war coverage:

Trade war, day 125: Pessimism surrounding U.S. elections, Singapore summit steals Shanghai trade fair’s thunder