Who really knows how and when the US-China trade dispute will be resolved?

Nonetheless, the Chinese government has successfully used its domestic monetary and fiscal clout to offset some of the trade war-induced slowing in its economy.

As well, China encouraged its currency to slide past the key 7 per dollar level in August for the first time since the global financial crisis, and as a result, the US labeled China a currency manipulator.

Despite the substantial yuan depreciation, China’s exports are still weak, suggesting that sluggish external demand is a most important factor affecting its exports this year.

Among its major trade partners, China’s August exports to the United States fell 16% year-on-year, slowing sharply from a decline of 6.5% in July. Imports from the US also slumped over the past year. China’s exports to Europe, South Korea, Australia, and Southeast Asia (ASEAN) have also worsened over the past year.  

China is also importing less from the rest of the world, pushing its trade surplus higher, which is also a drag on global GDP growth. Bear in mind that on a purchasing power currency basis, China’s economy is larger than the American economy.

China's trade surplus widened to $39.65 billion (USD) in September 2019 from $30.26 billion in the same month a year earlier. China’s exports declined 3.2% over twelve months, while imports dropped at a far faster 8.5%.

Paradoxically China’s weaker imports than exports may also hint at an underlying weakness in China’s own economy.

(Click on image to enlarge)

(Click on image to enlarge)

China’s Trade Surplus In US Dollars 

(Click on image to enlarge)

(Click on image to enlarge)