Chinese fear trade war under Trump as exports shrink
World’s second-largest economy struggles in face of weak global demand
Donald Trump: spent much of s election campaign calling China a cheat, promising to name China a currency manipulator on his first day in office and to impose high tariffs on Chinese goods. Photograph: Justin Lane/EPA
Chinese officials have expressed fears of a trade war with the United States under a Donald Trump presidency as data showed sluggish exports in 2016 on the back of tepid global demand. The country’s exports in yuan-denominated terms dropped 2 per cent to 13.84 trillion yuan (€1.89 trillion) year on year in 2016, while imports rose 0.6 per cent from the 2015 level to 10.49 trillion yuan (€1.43 trillion), according to the General Administration of Customs.
It was the second year in a row that exports fell and marks the worst export fall since the global financial crisis in 2009, with government officials saying the prospect of a trade war was clouding the picture for the current year.
US president-elect Trump, who will be sworn in on January 20th and who spent a good part of his election campaign calling China a cheat, has promised to name China a currency manipulator on his first day in office and to impose high tariffs on Chinese goods.
“The political landscape is changing significantly,” customs spokesman Huang Songping told reporters in Beijing. “Brexit, elections in major European countries, the new president in the US and the election in South Korea will all bring uncertainties to the current policies, and may add to the global protectionism trend, and China is the biggest victim of this trend,” Mr Huang said. “We will pay close attention to foreign trade policy after Trump is inaugurated president.”
China’s yuan currency fell 6.5 per cent against the dollar last year. Its foreign trade surplus narrowed to 3.35 trillion yuan in 2016, down 9.1 per cent from a year earlier. The Communist Party is currently trying to keep economic growth levels high in the face of sluggish international trade. The government expects economic growth of about 6.7 per cent for 2016, which is expected to be confirmed when official data for the fourth quarter is released on Monday.
Looking at December, exports in yuan terms rose 0.6 per cent while imports posted a 10.8 per cent gain for the second month in a row. Exports to the European Union resumed declines in December, falling 4.7 per cent, while shipments last month to the US, which is China’s largest trading partner, rose 5.1 per cent.
Meanwhile, Ireland’s share of imports into China has risen strongly in the past 12 months. China is becoming an increasingly important for Irish exporters, and Irish exporters, especially in areas such as food and drink, are carving out a major niche in the world’s second-biggest economy.
Sales to China rose 35 per cent jump last year, and the country now accounts for close to 8 per cent of Irish food and drink exports, almost as much as North America, data from Bord Bia showed this week.