Cross-strait trade picked up in 2017: Chinese customs

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China's exports grew at a faster-than-expected pace in December, data from the General Administration of Customs showed Friday.

"We have...long expected China's domestic demand and imports to slow in 2018 on gradually tighter monetary and financial policies and slower real estate activity momentum", Louis Kuijs, an economist with research firm Oxford Economics, said in a note.

China's imports from North Korea plunged in December to their lowest level in dollar terms since at least the start of 2014, with trade curbed by United Nations sanctions aimed at persuading North Korea to abandon its ballistic missile and nuclear weapons programmes.

"Export prospects remain solid, given our outlook for growth globally, although more forceful USA trade restrictions on China's exports remain a key risk, following another rise in the U.S.' bilateral trade deficit in 2017", he said. Russian Federation estimated in 2016 that the annual trade flows between the two world powers were at $66.1 billion.

Specifically, China's exports to Taiwan were valued at 297.9 billion yuan in 2017, while its imports were 1.05 trillion yuan, an annual growth of 12.2 percent and 14.5 percent, respectively, the data indicated.


"In terms of how big of an impact it (falling trade) had on North Korea, there was definitely impact because some of their products could only go to China while others could only be imported from China", said Chen Fengying, an economics expert at state-backed China Institutes of Contemporary International Relations.

That compares with a 3.7% on-year decline recorded in 2016, data from the General Administration of Customs showed. An imports boom is being driven by the economy's unexpectedly robust expansion in 2017, with the nation's gross domestic product expanding by about 6.9 per cent a year ago, the official Xinhua News Agency cited Premier Li Keqiang as saying this week. China's December trade surplus with the US was $25.55 billion, compared to $27.87 billion in November. The investigation, based on the rarely-used Section 301 of the Trade Act of 1974, could be a precursor to retaliatory USA policies such as hefty tariffs on Chinese imports.

China has so far resisted taking major retaliatory action against U.S. imports despite a volley of new duties and investigations from the White House. The rate is also a steep fall from November's 17.7 percent.

"Import growth outpaced that of exports significantly for the whole year of 2017, indicating that China's growth profile has been experiencing a transition as domestic demand has been picking up", said Zhou Hao, a senior emerging markets economist at Commerzbank in Singapore.

He estimated that imports declined by the biggest margin in nearly two years in volume terms in December as purchases of industrial commodities plummeted. Prices were around 5,500 yuan (US$848.44) per tonne this week, off 45% from peaks seen in late December.

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