BEIJING: China's trade surplus with the US narrowed in January even as its American imports plunged, buffeted by a slowing economy and the tariff battle with Washington, data showed on Thursday (Feb 14).
The surplus - a major source of anger within the Trump administration, which imposed levies on hundreds of billions of dollars worth of Chinese goods - fell to US$27.3 billion, from US$29.9 billion in December.
Last year it hit a record US$323.3 billion.
But China's imports from the US shrank 41 per cent from a year earlier, data from the customs administration showed.
Chinese buyers pulled back from purchasing American agricultural and energy commodities, which Beijing slapped with retaliatory tariffs last year.
China's exports to the US fell more than two percent in January year-on-year.
Trump in December postponed plans to sharply hike tariffs on US$200 billion of Chinese imports until Mar 2 to allow more time for negotiations.
This week officials from the world's top two economies are meeting for crucial trade talks in Beijing, with Trump suggesting he may be open to extending the trade truce depending on progress.
"Based on the positive signals from the US-China trade negotiations, further tariff hikes will likely be suspended," noted Louis Kuijs of Oxford Economics, adding he expected continued pressure on exports due to a global slowdown and the existing US tariffs.
China's global exports - all countries including the US - unexpectedly rose 9.1 per cent in January from a year earlier, turning a corner after exports fell in December.
"One possible explanation for January's upbeat export data could be some re-arrangement of regional supply chains on the back of the ongoing China-US trade dispute," said Betty Wang, an economist at ANZ bank.
Exports to Europe and ASEAN countries surged, she noted.
China's imports, however, continued to fall in January, down 1.5 per cent from a year earlier, though at a slower pace than a 10.2 per cent decline forecast by Bloomberg News.
"The import slowdown in recent months obviously in part reflects the slowdown in China's domestic economy," said Kuijs.
A slew of bad economic data has added to concerns about China's economy, which grew at its slowest pace in almost three decades last year.
Analysts cautioned that it is difficult to compare trends at the start of the year due to the Chinese New Year holiday, which came in early February this year and can affect business activity.
"The broad trend in shipments still appears to be pointing down," said Julian Evans-Pritchard of Capital Economics.
"The downbeat outlook for global growth means that this year is likely to be challenging for Chinese exporters, even if the ongoing US-China trade negotiations culminate in a deal," Evans-Pritchard wrote in a research note.