China's exports beat gloomy forecasts to rebound in May though imports sank more than expected, official data showed Monday, as concerns lingered about the impact of its ongoing trade war with the United States.

The spat between the world's top two economies escalated last month, with President Donald Trump increasing tariffs on $200 billion in Chinese goods.

But Chinese exports to the world bounced back to rise 1.1 percent last month after falling 2.7 percent in April, according to customs data. Analysts surveyed by Bloomberg News had forecast a 3.9 percent drop.

Imports, however, plummeted 8.5 percent after rising 4.0 percent in April.

The trade surplus surged to $41.7 billion in May compared with $13.8 billion the previous month. The politically sensitive surplus with the United States was $26.9 billion, up from $21 billion in April.

Trade talks between Beijing and Washington have stalled while the two countries have threatened to slap more sanctions on each other.

Trump has blacklisted Chinese telecom giant Huawei and warned that he could impose tariffs on nearly all remaining products from China, worth more than $300 billion.

Beijing responded to Trump's latest tariff hike by increasing levies on $60 billion of US products on June 1.

China is also preparing its own blacklist of "unreliable" companies and has suggested that it could halt exports of rare earth minerals -- key to the production of many high-tech goods -- to the United States.

Trump is expected to meet Chinese President Xi Jinping at the G20 summit in Japan at the end of the month.

US Treasury Secretary Steven Mnuchin said at a G20 meeting of finance ministers Saturday that any potential deal with China will wait until the two presidents meet later this month, but Washington was ready to impose new tariffs if talks fail.

- Tumble expected -

Analysts said despite the rebound in exports, China's trade outlook is likely to suffer because of the turbulence ahead.

"While exports rose in May, weaker global demand and the escalating trade war suggest that they will start to fall again before long," Marcel Thieliant, senior economist at Capital Economics, said in a note.

Others attributed the bounce in May to exports being scheduled so they are shipped ahead of when tariffs kick in, pointing to a likely drop later in the year.

"The better-than-expected exports in May, which could have been helped by a depreciation in... (China's currency) and front-loading of shipments amid fears of higher US tariffs, do not change our overall cautious view on China's export look for 2019," Betty Wang, Senior China Economist at ANZ Research, said in a note.

The export turbulence ahead could prompt Beijing to intervene and stimulate the economy.

The growth of China's exports should "tumble in Q3, when we expect the threatened tariffs to be imposed," Nomura International said in a note.

"Therefore, we believe Beijing is to step up its stimulus measures to stabilise financial markets and growth."

Chinese vendors, Mexican clients commiserate on Trump tariffs at trade expo
Mexico City (AFP) June 7, 2019 - Huang Chao came to Mexico looking for business, not friends, but the Chinese sales manager says he found unexpected common ground with his prospective clients on one thing: Donald Trump "is crazy."

Chao, 31, was in Mexico City this week representing his textile company at a trade fair called Expo China HomeLife, whose goal is to connect Chinese suppliers with merchants in different countries around the world.

Mexico was set to be just another stop for the enormous expo -- until the US president threatened last week to impose five-percent tariffs on all Mexican imports.

The tariffs are due to start Monday and rise in monthly increments to 25 percent by October, unless Mexico slows the US-bound flow of undocumented migrants to Trump's satisfaction.

That effectively made Mexico the second major front after China in Trump's spiraling trade wars.

It also gave vendors and customers in Mexico City a new topic to discuss in stilted English as they brokered deals for mass quantities of home articles, plastic accessories, cheap decorations, cloth and other myriad products the Asian powerhouse exports to the world.

Trump's tariffs "aren't just hurting China, they're hurting the whole world," Huang told AFP.

"He is hurting both countries' feelings," said businesswoman Louisa Chin, 30, referring to Mexico and China.

"He knows how to rile up his voters," said Alejandro Becerril, a Mexican builder, after an animated conversation with a group of Chinese business executives.

"He's trying to get Mexico to toughen up its migration policies -- and it's working."

- My enemy's enemy... -

The United States is already deep into a trade and technological battle with China.

Last month Washington raised tariffs on $200 billion in Chinese goods to 25 percent. Beijing hit back with retaliatory tariffs of five to 25 percent on $60 billion in US goods.

Trump is threatening to expand the tariffs to essentially all Chinese imports, and has also moved to blacklist a Chinese tech giant, Huawei, over national security concerns.

The spat had been beneficial for Mexico, which has replaced China as the top US trading partner so far this year.

But now Mexico is getting a taste of what Beijing calls Trump's "economic terrorism" -- pushing the US neighbor closer to China.

"In the current global context, there are many things China and Mexico can do together," Lo Tu, deputy mayor of the Chinese city of Shantou, said in Mexico City.

"Mexico and China are friends and partners. Mexico can be stronger with China, and China can be stronger with Mexico," Mexico's Undersecretary for Foreign Trade Luz Maria de la Mora said during a visit to China this week.

This is not the first time Mexico -- long used to living in the shadow of its giant northern neighbor -- has eyed closer ties with China when its trade relationship with the US frays.

There was a similar effect when Trump threatened to rescind the North American Free Trade Agreement (NAFTA) between the US, Mexico and Canada.

Mexico sends nearly 80 percent of its exports to the US, and the countries do more than $600 billion a year in bilateral trade, according to Washington.

The world's second-largest economy is an obvious place for Mexico to turn to try to diversify its trade portfolio.

In 2017, Mexico and China did $80.9 billion in two-way trade, according to Mexico's central bank. But the bulk of it was Chinese exports to Mexico: $74.1 billion.

Mexican officials will have to do more to cultivate ties with Beijing if they truly want to deepen the relationship, said China expert Enrique Dussel of Mexico's largest university, UNAM.

"Mexican officials always seem to be saying, 'China will help us out of the ditch,'" said Dussel.

"But we have to be more serious about the relationship," he added.

"Whenever Trump sticks his tongue out at us on Monday, we turn to China on Tuesday. Then Trump lifts the tariffs on Wednesday, and on Thursday we forget about China. That's not how you manage a relationship with a country" like China, he said.

Still, ties are growing. A record 1,600 companies attended the trade fair this year -- up 500 from last year.

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China warns its citizens of police harassment, crime in US
Beijing (AFP) June 4, 2019
China on Tuesday issued a pair of travel alerts to its citizens going to the United States, warning them about police harassment and crime as tensions soar between the global powers. The world's two largest economies have been locked in a protracted trade war, and any major drop in Chinese tourism to the United States could cost billions to the US economy. While it did not threaten to curb tours to the United States, China has used tourism as a weapon during previous diplomatic rows with South K ... read more