CHINA's trade surplus with the US has grown
almost 25 per cent since the start of the Trump presidency, exceeding US$300
billion on an annualised basis, Bloomberg reported citing Jim McCormick of NatWest Markets.
China
is also nowhere near on track to meet its target of increasing imports from the
US under the partial deal (also called "phase 1") to end the trade
conflict, the signal accomplishment of Mr Trump's tariff tit-for-tat.
The
nation's GDP surged as a result of its vastly more effective response to the
pandemic that began there. China, Mr McCormick notes, is the only country among
48 to have reported a second-quarter gross domestic product number that was
higher than at the end of 2019. In the US, the worst country when it comes to
the coronavirus (as measured by death and infections), the economy shrank 9.5
per cent in the second quarter, a drop that equals an annualised pace of 32.9
per cent, its sharpest downturn since at least the 1940s.
The
Chinese currency is on a tear, climbing for the eighth week in a row, its
longest run of gains since February 2018. Global bond funds are pouring into the
country - one that still offers yields. Meanwhile, the dollar is slumping.
Behind
these headline numbers also are deeper industrial trends, which again work in
China's favour, helping it pick up global market share in the aftermath of
Covid-19 lockdowns. Increasingly, China is supplying the kind of sophisticated
machinery that German manufacturers once dominated, like high-end tunnel borers
and hydraulic valves and pumps used in wind turbines.
"It's
only a matter of time until Chinese firms are No 1," says Ulrich
Ackermann, managing director for foreign trade at Germany's VDMA Mechanical
Engineering Industry Association.
The
net result of Mr Trump's efforts to decouple the US and Chinese economies is to
push China even further toward self-sufficiency, a strategy set to be enshrined
in China's new five-year plan at a meeting of the Chinese Communist Party
Central Committee next month.
Source
: HKSG / Photo : IRPJ.
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