2018年2月美中贸易公报（英文版）-1mb

2018 February Economics and Trade Bulletin Summary

Core Content Overview

This summary highlights key developments in U.S.-China trade and economic relations in early 2018, including trade deficits, policy issues, economic performance, and trends in Chinese outbound investment.

Main Points

Bilateral Trade

• U.S. Goods Trade Deficit with China:

  • The U.S. goods trade deficit with China reached $375.2 billion in 2017, a 8.1% increase from 2016, setting a new record.
  • In Q4 2017, the deficit grew to $101.5 billion, a 13.2% increase year-on-year.
  • Imports grew at a faster rate than exports, with key import categories including mobile phones, household items, and computers.
  • Crude oil exports saw a significant rise, increasing from $685 million to nearly $2.8 billion in Q4 2017.

• U.S. Services Trade with China:

  • U.S. services exports to China grew at the slowest rate since 2009, mainly due to a slowdown in Chinese tourism to the U.S.
  • In Q3 2017, U.S. services exports to China totaled $16.3 billion, while imports were $4.2 billion, resulting in a $12 billion surplus.
  • Tourism accounted for 63% of U.S. services exports to China in Q3 2017, but growth slowed to 1% year-on-year.

Bilateral Policy Issues

• The USTR 2017 Report on China's WTO Compliance criticized China for noncompliance with WTO rules, particularly in areas such as technology transfer, government procurement preferences, biotechnology regulatory transparency, and cybersecurity restrictions.
• The report noted that the Chinese government has not improved on persistent trade issues, and that the U.S. and other partners continue to face serious problems with China's trade regime.
• The report suggested that the U.S. made a mistake in supporting China's WTO accession, as it has not led to an open, market-oriented trade regime.

Quarterly Review of China's Economy

• China's GDP growth reached 6.9% year-on-year in 2017, surpassing the official target of 6.5%.
• Domestic consumption, industrial output, and global demand were key drivers of this growth.
• Fixed asset investment (FAI) growth slowed to 5.9% year-on-year, down from 8.1% in 2016.
• Household consumption growth also slowed to 7.1%, lagging behind income growth of 9%.
• Real estate investment and property prices decelerated, reflecting a cooling property market.

Policy Trends in China's Economy

• Bitcoin Mining Crackdown:

  • The Chinese government introduced measures to discourage bitcoin mining, including ending preferential policies, increasing taxation, and using environmental and electricity cost controls.
  • These measures could end China's dominance in the global bitcoin mining industry, which is estimated to account for 75% of global supply.
  • Major mining companies like Bitmain and BTC.Top are exploring overseas operations in countries like Singapore, Canada, and Switzerland.

• RMB Exchange Rate Management:

  • The PBOC removed the counter-cyclical adjustment factor from the RMB's daily reference rate calculation.
  • This move reflects confidence in the RMB's appreciation, which increased by 7.7% against the U.S. dollar since May 2017.
  • The removal of the factor may lead to greater RMB flexibility, but the PBOC could reintroduce it if market volatility increases.

Key Information

• Trade Deficit: The U.S. goods trade deficit with China reached $375.2 billion in 2017, with crude oil and ICT being major contributors.
• Services Trade: The U.S. services surplus with China reached $12 billion in Q3 2017, but tourism growth slowed significantly.
• WTO Compliance: The USTR report highlighted ongoing issues with China's adherence to WTO rules, particularly in technology transfer and cybersecurity.
• Outbound Investment: Chinese outbound FDI dropped 35% in 2017, attributed to capital control measures and regulatory scrutiny.
• Bitcoin Regulation: China's crackdown on bitcoin mining is part of broader efforts to control financial stability and energy consumption.
• RMB Appreciation: The RMB appreciated 7.7% against the U.S. dollar since May 2017, bolstering foreign exchange reserves.

Sector Focus: Chinese Outbound Investment

• HNA and Ant Financial:
  • Acquisitions by HNA and Ant Financial in the U.S. faced concerns over espionage, opaque ownership, and privacy issues, leading to terminated deals.
• Huawei:
  • Huawei's U.S. carrier partnerships were affected by regulatory and political pressures.
• Capital Controls:
  • The Chinese government's capital controls significantly reduced outbound investment, with U.S. investment deals 90% lower than 2016.

Conclusion

The report outlines a complex landscape of trade imbalances, policy tensions, and economic shifts in U.S.-China relations. Despite China's economic growth, trade deficits and regulatory actions have raised concerns about market access, intellectual property, and financial stability. The U.S. and China continue to navigate these challenges through trade policies, regulatory actions, and economic indicators.