China expressed concern on Thursday over the US ramping up trade investigations as official data showed its surplus with America narrowed in January after reaching record levels last year.
This week China announced an investigation into imports of a US agricultural product after President Donald Trump’s administration launched a spate of new trade tariffs and probes into Chinese goods.
The Trump administration has shown no signs of letting up, with major decisions looming on Chinese aluminium, steel and intellectual property practices.
The tensions are raising the spectre of a tit-for-tat trade war between the world’s two largest economies.
“There has been an upward trend in US investigative organs looking into China’s products and launching trade relief cases,” said Ministry of Commerce spokesman Gao Feng during a press conference. “China is worried about this.”
The US imposed new tariffs on Chinese-made solar panels and washing machines this year after hitting aluminium foil and plywood last year.
China has so far held off from retaliating by adding new tariffs on US imports, but Beijing has indicated it may not show such restraint for much longer.
This week China initiated an anti-dumping investigation into sorghum imports from the US, worth almost $1 billion last year.
That was a sliver of the $14 billion in US soybean imports, which China hinted could be in its crosshairs as well. It was America’s largest export to China last year.
Gao did not deny reports Chinese authorities were looking into soybean and cotton imports, after a journalist from state news agency Xinhua asked about reported meetings regarding the two items over anti-dumping and anti-subsidy issues.
“Recently we did hold a symposium with enterprises that import and export agricultural products,” Gao said, noting it was to “understand the operation of foreign trade in agriculture”.
Though Gao denied it was connected to “Sino-US trade frictions”, he said “related agricultural companies did indeed mention issues in the Sino-US agricultural product trade” with some producers “expressing concerns about the impact of imported agricultural products”.
Surplus slims down
Official data released by China’s General Administration of Customs may relieve some pressure generated by its vast trade surplus with the US.
It reached record highs during Trump’s first year in office — $375.2 billion by US counting, or $275.8 billion according to Chinese data.
In January, China’s trade surplus with the US dropped to $21.9 billion, from $25.6 billion in December. The figure is roughly equal to the surplus China posted with the US in January 2017.
Still, analysts worry the persisting deficit will compound sensitive trade relations between the two countries.
“The uncertainty surrounding Sino-US trade ties remains a key potential downside risk in the near term,” said Betty Wang, senior China economist at ANZ bank.
There is a large gulf between the two sides on how they view the massive deficit.
“Generally Sino-US trade interests are relatively balanced,” Gao said, after explaining the gap shrinks when considered on a value-added basis.
— China’s booming imports —
Beyond the risks in the US-China trade relationship, official data on Thursday showed China’s imports soared and exports remained strong in January.
Imports for the month surged 36.9 per cent year-on-year, pointing to robust demand in the world’s number two economy to start the year.
China’s continued economic strength flies in the face of the authorities’ campaign to limit credit growth and reduce winter pollution by cutting industrial production.
The wave of imports — buoyed by rising commodity prices — greatly surpassed analyst estimates of 10.6 per cent growth for the period, according to Bloomberg News.
Analysts attributed part of the rise to the Chinese New Year holiday falling in February this year, as opposed to January last year.
Even so, the “out-turn exceeded expectations”, wrote Julian Evans-Pritchard, China economist at Capital Economics.
China’s exports remained strong as well, posting 11.1 per cent growth for the month, beating analyst expectations of 10.7 per cent.
The humming global economy continues to eat up China’s products, giving its leaders more time to achieve their goal of transitioning the economy from one driven by exports and investment to a more stable model propelled by domestic consumption.