China’s exports continue to increase despite trade war with U.S.

China is seeting increased exports desite the ongoing trade war with the US with reports indicating that exports from China surged more than expected in July.

U.S. President Donald Trump is putting increased pressure on Beijing to negotiate trade concessions with Washington set to begin collecting 25 per cent tariffs on another $16 billion in Chinese goods on Aug. 23. Despite these tensions, Chinese data indicate that exports in July rose by 12.2 per cent year-on-year contrary to various polls that showed a maximum of 10 per cent growth.

Another point that is a sticking one for the U.S. is the Chinese government’s constant manipulation of Yuan prices against the Dollar. Economists say China appears to be taking a more hands-off approach to the yuan, which marked its worst 4-month fall on record between April and July and has provided some reprieve for exporters in the face of the rising trade tensions.

Analysts still expect a less favourable overall trade balance for China in coming months given it’s early days in the tariff brawl.

On the import’s front, Chin’s imports rose 27.3 per cent year-on-year in July, in a sign domestic demand remains solid, but the worry is that the escalating Sino-U.S. trade war, rising corporate bankruptcies, and a steep decline in the yuan could put a significant dent on the economy.

The government has responded by releasing more liquidity into the banking system, encouraging lending and promising a more “active” fiscal policy.

World financial markets have taken a battering in recent months as fears grow that Trump’s “America First” policies could derail a global economic revival.

Several large American companies have said they would adjust their supply chains to source outside of China if tariffs on Chinese goods impacted them, while China`s Haier Group said rising steel prices amid hefty U.S. import tariffs was driving up costs for its business in America.

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