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China Trade Rises as Economy Recovers  07/14 06:33

   

   BEIJING (AP) -- China's trade improved in June in a fresh sign the world's 
second-largest economy is recovering from the coronavirus pandemic. But its 
exporters face threats including tension with Washington and a possible 
downturn in U.S. and European demand.

   Chinese imports rose 3% over a year earlier to $167.2 billion, rebounding 
from May's 3.3% decline, customs data showed Tuesday. Exports edged up 0.4% to 
$213.6 billion, an improvement over the previous month's 16.7% contraction.

   Imports of U.S. goods surged 10.6% to $10.4 billion despite tariff hikes in 
a fight with Washington over trade and technology. Exports to the United States 
gained 1% to $39.8 billion.

   China, where the pandemic began in December, was the first economy to start 
the struggle to revive normal business activity in March after declaring the 
virus under control. Manufacturing is recovering, but consumer spending is 
weak. Forecasters say exports are likely to slump as demand for masks and other 
medical supplies recedes and U.S. and European retailers cancel orders.

   Leading indicators "suggest that exports will start to contract again before 
long," Martin Rasmussen of Capital Economics said in a report.

   Relations with the United States, China's biggest national export market, 
have deteriorated to their lowest level in decades.

   Disputes over Hong Kong, human rights and the South China Sea added to 
strains that began with a tariff war launched by the Trump administration in 
2018 over Beijing's technology ambitions and trade surplus.

   The two sides have announced sanctions on some prominent Chinese and U.S. 
political figures in a dispute over abuses in the northwestern region of 
Xinjiang, though it is unclear whether those officials will be affected.

   President Donald Trump said Friday that work on the second stage of a deal 
aimed at ending the tariff war is a low priority because relations were 
"severely damaged" by Beijing's handling of the pandemic.

   The two sides signed a "phase one" agreement in January to postpone further 
penalties but tariff increases already imposed stayed in place.

   China's June imports were boosted by a 74% increase in purchases of U.S. 
soybeans under a pledge by Beijing in that January agreement to narrow its 
trade surplus with the United States by importing more food and other goods.

   "China's imports from the U.S. will likely remain elevated in the second 
half of this year," said Nomura economists in a report.

   Imports of U.S.-made semiconductors accelerated to 18.6% growth over a year 
earlier, which Citigroup economists suggested might have been motivated by 
concern U.S. export sanctions imposed on Chinese tech giant Huawei Technologies 
Ltd. will be fully enforced once a temporary postponement ends.

   Imports "should continue to ramp-up" as the government spends more to 
support economic recovery and consumer demand, Rasmussen said.

   China's global trade surplus narrowed to $46.4 billion from May's $62.9 
billion.

   The Chinese economy shrank by 6.8% in the first quarter, its worst 
performance since at least the mid-1960s. The ruling party skipped announcing 
an annual economic growth target, but private sector forecasts range from low 
single digits to a small contraction.

   Some forecasters raised their outlook slightly after factory activity in May 
improved more than expected.

 
 
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