China's massive export machine is shrugging off the trade war, but there are doubts how much longer it can keep it up.
Chinese exports rose nearly 15% in September compared with the same month a year earlier, according to government data published Friday. That beat analysts' forecasts and was stronger than the previous month.
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The acceleration suggests China is weathering the first waves of new tariffs that the Trump administration imposed on $50 billion of Chinese exports this summer.
"The big picture is Chinese exports have so far held up well in the face of escalating trade tensions," Julian Evans-Pritchard, senior China economist at research firm Capital Economics, said in a note to clients Friday.
Chinese exports are benefiting from the drop in the value of the country's currency. The yuan has slumped about 9% versus the US dollar over the past six months as investors have become more concerned about the health of China's economy. A weaker currency makes Chinese goods more competitive compared with those of rival exporters.
That may have helped China's trade surplus with the United States jump to a monthly record of $34 billion in September. The huge surplus is one of US President Donald Trump's chief grievances in the trade dispute.
Chinese exporters may also have rushed through orders in September before a new wave of US tariffs kicked in at the end of the month, said Louis Kuijs, head of Asia economics at research firm Oxford Economics.
The United States imposed new 10% tariffs on a further $200 billion of Chinese goods on September 24.
Tough months ahead
Those new measures will make it hard for Chinese exporters to maintain September's strong performance.
"With global growth likely to cool further in the coming quarters and US tariffs set to become more punishing, the recent resilience of exports is unlikely to be sustained," Evans-Pritchard said.
Chinese officials also acknowledge that tougher months are head.
Growth in exports may slow in the last three months of the year, Li Kuiwen, a spokesman for China's customs agency, said at a news conference Friday.
"There are many uncertain and unstable factors in the international environment, and the China-US trade friction is constantly escalating," he said.
The Trump administration plans set to raise its tariffs on the $200 billion of Chinese goods from 10% to 25% at the end of the year. And Trump has said he's prepared to expand the tariffs to effectively cover all Chinese exports to the United States, which topped $500 billion last year.