China buys more US farm products amid falling trade

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Flags of the United States and China displayed on a table before a meeting.

Jason Lee | AFP | Getty Images

China said on Tuesday it bought twice as many U.S. agricultural products in the first quarter as it did a year ago, a sign that countries are implementing part of the phase one trade deal despite the coronavirus pandemic.

The Asian giant imported 35.56 billion yuan ($ 5.08 billion) of American agricultural products in the first quarter, according to its customs agency. The volume of imported soybeans also doubled and that of pork increased more than six-fold, the agency said, while Chinese cotton imports rose 43.5 percent.

From a price point of view, China imported 21.88 billion yuan of soybeans, twice as much as a year ago. Pork imports amounted to 3.04 billion yuan, an increase of 16 times. That of cotton was 1.59 billion yuan, an increase of 17%.

The phase one China-U.S. Trade deal is being phased in, Chinese customs spokesman Li Kuiwen said at a press conference on Tuesday, according to a CNBC translation of his Mandarin remarks.

The world’s two largest economies signed the deal in January, temporarily resolving more than 18 months of escalating trade tensions. China has agreed that over the next two years it will buy at least $ 200 billion more in US goods and services than in 2017. Planned purchases include at least $ 32 billion more in agricultural products. , with an unspecified amount of soy.

However, some doubted that China could finally satisfy such a high level of purchases. Many are also concerned that the coronavirus outbreak could hamper the ability of the two countries to meet the trade deal.

Global demand is falling

The disease, officially known as Covid-19, first hit China late last year and shut down much of the country’s economy in February in an extension of the Lunar New Year holiday. The disease has since spread globally, forcing local governments to enact similar lockdowns in an attempt to limit the spread of the virus which has now killed more than 119,000 people worldwide.

While Chinese businesses have mostly reopened in recent weeks, factories and other businesses that depend on exports have been hit by weaker demand from overseas customers whose businesses are now closed due to the virus.

Chinese exports fell 17.2% in US dollars in January and February from the first two months of last year, with the decline narrowing to 6.6% in March.

“Since the coronavirus epidemic did not become much (more) serious in Europe and North America until the end of February, its impact on Chinese exports to these destinations may not become apparent until the second quarter, particularly in April and May, “Ting Lu, chief China economist at Nomura, said in a note Tuesday. “We expect China’s export growth to fall to around -30% year-on-year in the second quarter.”

In the first quarter, overall trade between China and the United States fell 18.3% from a year ago to 668.01 billion yuan ($ 95.43 billion), Chinese exports to the United States falling 23.6% and imports by 1.3%, the customs agency said.

Mechanical and electrical products accounted for over 60% of Chinese exports to the United States in the first quarter, and fell 24.1% to 292.57 billion yuan from a year ago.

Exports of cellphones fell 10.3%, while those of drugs and medical supplies rose 6.3%, according to Chinese customs.


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