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China’s exports beat forecasts amid precautions against Trump’s tariff threat

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China’s exports surged at their fastest pace in two years this October, as factories increased shipments to key markets to counter new tariffs from the United States and European Union and the looming risk of a two-front trade war.

The recent victory of Donald Trump, who has pledged to impose tariffs exceeding 60 percent on Chinese imports, is likely to lead to a buildup of stockpiles in China’s top export markets.

Trump’s tariff threat has unsettled Chinese factory owners and officials managing exports worth approximately $500 billion annually. Tensions are further strained by trade issues with the EU, which purchased $466 billion of Chinese goods last year.

While domestic confidence remains impacted by a persistent property market debt crisis, export momentum offers a bright spot for China’s struggling economy.

Exports from the world’s second-largest economy rose by 12.7 percent year-on-year last month, surpassing a 5.2 percent increase forecasted by Reuters economists and a 2.4 percent rise in September. However, imports fell by 2.3 percent, against predictions of a 1.5 percent decline, marking the first negative import growth in four months.

China’s trade surplus climbed to $95.27 billion in October, up from $81.71 billion in September.

“We anticipate a wave of front-loading into Q4 before pressure mounts in 2025,” said Xu Tianchen, senior economist at the Economist Intelligence Unit. “This is largely due to Trump’s tariff threat, which is becoming increasingly realistic.”

The ‘Trump effect’ on exports

China’s exports to the U.S. increased 8.1 percent year-on-year in October, while shipments to Europe rose by 12.7 percent over the same period.

“We expect exports to remain strong in the coming months,” said Zichun Huang, China economist at Capital Economics, in a note. He added that the impact of Trump’s tariffs may not materialize until late next year.

Huang noted that Trump’s return could prompt U.S. importers to step up purchases to bypass potential tariffs, offering a short-term boost to Chinese exports.

China’s top exports to the U.S. last year included smartphones, tablet computers, and video game consoles. Similar to Trump’s initial term, Chinese electronics makers may once again be a target.

Yet, signals indicate waning demand for these goods. Trade data from South Korea and Taiwan points to slowing global demand, and German producers report declining interest from overseas buyers, suggesting that Chinese producers may be cutting prices or moving inventory out of China to attract buyers.

An official survey of factory activity in October showed Chinese factories struggling to secure overseas buyers.

“If the PMI new export sub-index is dropping while the export numbers are rising, it’s clear this is an inventory adjustment,” said Dan Wang, a Shanghai-based Chinese economist.

Rising rtocks and weak yuan boost exports

Chinese and Hong Kong stocks rose on Thursday, buoyed by investor optimism over potential stimulus measures, while the yuan rebounded from a three-month low against the dollar. Analysts note that the weak yuan may have fueled export growth, though it simultaneously raised import costs.

China’s imports from the European Union and Southeast Asia fell by 6.1 percent and 7.3 percent year-on-year last month, while Japanese imports continued to rise. Notably, crude oil purchases—from the world’s largest oil importer—dropped by 9 percent, marking the sixth consecutive month of decline on an annual basis.

Zhou Maohua, a macroeconomic researcher at China Everbright Bank, attributed the decline in import growth to weak domestic demand and low import prices.

Conversely, China’s soybean imports surged last month, as U.S. grain exporters raced to meet demand in China ahead of the U.S. election.

Economists warn against over-reliance on exports

Amid these challenges, economists urge Beijing to avoid over-reliance on exports for growth, recommending more economic stimulus to stabilize the economy.

ANZ analysts forecast a policy response involving monetary measures and other strategies to mitigate Trump-era tariff pressures.

“Authorities may also implement measures to cushion the tariff impact, such as subsidies or better access to financing,” said Raymond Yeung, ANZ’s chief economist for Greater China. He added that policy initiatives could also focus on domestic consumption campaigns and diversifying export markets within Belt and Road countries.

ASIA

Syria will not follow Afghanistan’s Taliban model of governance

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In an astonishing statement, Ahmed Shará, also known as Abu Mohamad Jolani, the leader of the Hayat Tahrir al-Sham (HTS) said that he will allow the girls to go to schools and will not turn Syria like Afghanistan under the rule of the Taliban.

Jolani, the de facto ruler of Syria, said that he will distance himself from the Taliban’s strict policies on women’s rights, and said that Syria will not follow the Taliban’s mode of governance.  

Jolani, who brought down the government of Bashar al-Assad and also widely welcomed by the Taliban, said that he believes in the education of women and girls and will not make Syria like Afghanistan.

“Syria is a diverse society with various ideas, unlike Afghanistan, which is more tribal. The Afghan model cannot be applied here,” Jolani told a BBC reporter.

Jolani says that Syria is a diverse society with various ideas, unlike Afghanistan, which is more tribal.

Jolani’s comment came when the Taliban congratulated the HTS-led victory by Jolani over Assad’s regime after years of fighting. The Afghan Foreign Ministry celebrated Jolani’s victory through a statement and hoped Jolani can bring peace and stability in the country.

“It is hoped that the power transition process is advanced in a manner that lays the foundation of a sovereign and serve-oriented Islamic government in the line with the aspiration of the Syrian people; that unifies the entire population without discrimination and retribution through adoption of a general assembly; and a positive foreign policy with world countries the safeguard Syria from a threat of negative rivalries of foreign actors and creates conditions for the return of millions of refugees,” the statement by Taliban Foreign Ministry.

However, Jolan’s position on the rights of women and girls is in great contrast with the current view of the Taliban leadership. Women and girls have been banned from education and work since the return of the Taliban in August 2021, following the collapse of the Republic System and withdrawal of the US troops from Afghanistan. Girls and women are even banned from medical institutions and visiting public spaces.

Jolani says he has a plan to create a government based institution and a council chosen by the people. 

The situation got worse when the Taliban’s Ministry for the Promotion of Virtue and Prevention of Vice called women’s voices “immodest” compounding their exclusion from public life. This year, it has been marked as three years since girls were banned from pursuing education over sixth grade. Besides that, on December 20, 2022, the Taliban’s Ministry of Higher Education announced that women would be barred from attending public and private universities.    

In an interview with CNN, Jolani said that he has a plan to create a government based on institutions and a “council chosen by the people.”

“When we talk about objectives, the goal of the revolution remains the overthrow of this regime. It is our right to use all available means to achieve that goal,” said Jolani.

“The seeds of the regime’s defeat have always been within it… the Iranians attempted to revive the regime, buying it time, and later the Russians also tried to prop it up. But the truth remains: this regime is dead.”

Moreover, he also said the Syrian people are the “rightful owners” of the country after the ouster of Assad, and declared a “new history” has been written for the entire Middle East.

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Yoon summoned again for questioning on treason charges

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A joint law enforcement team investigating South Korea’s martial law case announced on Friday that it has issued a second summons to ousted President Yoon Suk Yeol, requesting his presence for questioning next week. The inquiry concerns his alleged involvement in the failed implementation of martial law.

The team has scheduled the questioning for 10:00 a.m. next Wednesday at the Corruption Investigation Office for Senior Officials (CIO) headquarters in Gwacheon, located just south of Seoul. This marks the second summons after Yoon refused to cooperate with the initial notice earlier this week.

The decision to hold the questioning on a public holiday appears to be a strategic move by the CIO, likely aimed at addressing security concerns. The office confirmed that the summonses were delivered via express mail and electronically to both Yoon’s residence and the presidential office in Yongsan. Notably, after Yoon’s team refused to accept the first subpoena, the CIO opted against delivering the documents in person for this round.

The investigation focuses on Yoon’s role in the December 3 martial law declaration, which he revoked following a vote in the National Assembly. If Yoon continues to disregard the summons without valid justification, the CIO may seek a court order to detain him for up to 48 hours.

Yoon faces allegations of sedition and abuse of office, charges that have gained traction since his dismissal by parliament last Saturday. His suspension from office remains in effect pending a decision by the Constitutional Court, which will determine whether he is permanently removed or reinstated.

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Xi Jinping champions economic diversification during Macau visit

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During a three-day visit to Macau commemorating the 25th anniversary of its return to Chinese sovereignty from Portugal, President Xi Jinping emphasized the importance of economic diversification and maintaining the “one country, two systems” framework.

Speaking at the swearing-in ceremony for Macau’s new Chief Executive Officer, Sam Hou-fai, Xi urged the administration to make economic diversification the city’s primary focus. Sam, the fourth leader since the 1999 handover and the first mainland-born Chinese official to hold the position, is expected to align closely with Beijing’s objectives to reduce Macau’s reliance on gambling. The gambling industry, which accounts for approximately 80% of Macau’s tax revenue, has been the cornerstone of its rapid economic growth in recent years.

“Macau should prioritize proper economic diversification,” Xi stated, calling for enhanced policy support and investment in emerging sectors. He also reiterated the significance of the “one country, two systems” principle, stressing its role in ensuring the city’s “prosperity and stability” for the long term.

Xi’s visit included stops at the Macau University of Science and Technology, where he explored laboratories focusing on traditional Chinese medicine and planetary science. He also attended a cultural performance at the Macau Dome and met with local stakeholders, according to Chinese state media. His trip marked a shift in tone, with Anthony Lawrence, founder of Intelligence Macau, noting that it was the first time Xi publicly praised Macau for its progress rather than delivering critiques or instructions.

Since the liberalization of Macau’s gaming monopoly in 2002, the city has attracted significant foreign investment, including from prominent US casino operators such as Las Vegas Sands, MGM, and Wynn Resorts. However, the economy struggled during the COVID-19 pandemic due to travel restrictions, and recovery has only recently begun.

On Friday, Macau’s casinos were bustling with visitors, while non-gaming initiatives like a stamp exhibition co-organized by MGM China and Beijing’s Palace Museum showcased the city’s efforts to diversify its offerings.

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