China recorded on Friday its sharpest year-on-year downfall in exports in three years, with uncertainty likely to continue over Beijing’s trade dispute with the US that has been hurting the world’s second-largest economy.
Speculations that the trade dispute would soon be resolved have subsided over the past couple of days. Meeting between the US President Donald Trump and Chinese President Xi Jinping has been postponed back from the end of March, as both sides try to pin down details and avoid an embarrassing failure.
A meeting was earlier scheduled at Mar-a-Lago in Florida for March 27 or March 28, immediately following President Xi’s planned trip to Europe, though the dates were not yet finalized. This meeting is highly unlikely after the latest developments in the elongated Sino-US trade war. US ambassador to China Terry Branstad told we reported on Friday that no date had been set as the two sides were still negotiating.
Deputy Director of President Trump’s National Economic Council, Clete Willems, told reporters in a conference at Georgetown Law School on Friday that there were more things yet to be decided before an agreement could be reached. Mr. Willems stated that they haven’t reached where exactly they want to be, also stressing that President Trump was willing to “walk away” from a “bad deal” and concerns among China hawks that he would settle for a weak agreement were misplaced.
On the other hand, China’s top diplomat and State councilor Wang Yi said on Friday that negotiations to end the ongoing trade war with the US had made considerable progress. However, Yi warned against Washington’s attempts to separate the two intertwined economies. While commenting on the delay, Wang claimed that a few individuals want to separate the two interdependent economies, which according to him is quite wishful.
Separation from China would mean moving away from opportunities, says Jang.
China’s exports dropped by 20.7% last month, from what it was in February 2018. This is the biggest monthly fall since February 2016 and four times steeper than the 4.8 percent decline forecast in a Reuters poll of economists. Imports also came down by 5.2%, resulting in the smallest trade surplus for China in 11 months. Chinese stocks reported their biggest intraday dip since October last year, with the CSI 300 index of Shanghai and Shenzhen-listed stocks ending down nearly 4 percent.
The slowdown of Chinese exports is a matter of concern for the global economy. Recently in January, the IMF projected a 6.6% GDP growth rate for China for the FY20. Though it is still the second fastest growing economy behind only India, the downfall is quite critical. This was China’s worst performance in the last 28 years.
At the World Economic Forum in Davos, the IMF said that the Sino-US trade war had caused serious troubles to the global GDP. It also said that if the trade war continues, tensions regarding global economic growth will also continue to decline.
The Chinese exports data showed similar trends like other Asian markets. February saw exports from South Korea decline for the third consecutive month, while Japanese outbound trade fell by the most in two years in January.