Supply Chain Research

Chinese Prime Minister Li Keqiang closed the National Congress stating that the country does not “want to see any trade war breaking out” with the United States and hopes talks can “continue to move forward”, Reuters reports. This seemingly dovish tone comes ahead of plans for President Xi to meet President Trump in April, and just ahead of a visit to China by Secretary Tillerson this coming weekend. The timing of President Xi’s trip will be interesting in that it may come close to a U.S. Treasury Department decision on whether China is a currency manipulator or not, as discussed in Panjiva research of February 23.

While trade with the U.S. is a major issue for the Chinese government, it is by far the only one and possibly not the most important. Panjiva data for Chinese imports and exports shows that the European Union is in fact the largest trade partner over the past 12 months to January 31. Imports from the EU fell by 2.0% in the same period vs. a year earlier, while those from the U.S. fell 0.7%. China is also trying to close the RCEP trade deal that will address a market 2.2 times the size of its total trade with the U.S.

Chart shows change in China’s total import and export trade over the 12 months to January 31 on a year earlier. Bubble size indicates level of total trade. Colors for clarity only. Source: Panjiva