China’s trade surplus with the United States expanded last year, raising the possibility of fresh blowback from President Donald Trump who has often bashed Beijing over the issue and fanned fears of a trade war.The increase came despite a tumble in China’s global surplus as domestic demand spurred a rally in imports.The figures on Friday showed the difference between exports and imports with the United States expanded 10 percent to $275.8 billion.Trade between the two countries has become a sensitive issue with the US president hitting out at what he considers unfair practices by Beijing and accusing it of killing US jobs, at one time describing its policies as “rape”.The billionaire’s comments and economically nationalist platform — including pulling out of a key Pacific pact and threatening to tear up another with Canada — have fanned fears of a trade war. But while the former reality TV star has repeatedly threatened to take retaliatory action against China if it does not narrow the gap, he has so far held back. During his November visit to Beijing, the two countries announced more than $250 billion in business deals providing some salve to Trump’s fixation on trade.The increasing surplus is likely to give impetus to calls for tough measures. The US is expected to release the results of a major investigation into China’s intellectual property practices this year.China has so far resisted taking major retaliatory action against US imports despite a volley of new duties and investigations from the White House. But historically, Beijing has responded to new US tariffs with tit-for-tat measures and it is unclear how long its leaders will restrain themselves.“A major uncertainty is potential China-US trade frictions,” Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered in Hong Kong told Bloomberg News. Friday’s report from the General Administration of Customs showed China’s exports expanded 7.9 percent while imports soared 15.9 percent. The humming global economy helped propel China’s trade, giving its leaders more time to achieve their goal of transitioning the economy from one driven by exports and investment to a more stable model propelled by domestic consumption.“China’s foreign trade continued to build on a solid foundation for steady growth, its potential being gradually unleashed,” said customs spokesman Huang Songping.“As the global economy continues to recover and the Chinese economy turns to steady and sound growth, China’s foreign trade outlook in 2018 is upbeat.” But the figures indicated a slowdown in trade activity at the end of 2017.Exports grew 10.9 percent for the month, slightly beating analyst estimates compiled by Bloomberg News, but imports fell well short of expectations, growing 4.5 percent. Forecasts in a Bloomberg survey were for of 15.1 percent import growth. The rate is also a steep fall from November’s 17.7 percent.“Although the trade data are often volatile, this latest decline – the largest in almost two years – is a sign that domestic demand may have weakened at the end of last year,” said Julian Evans-Pritchard, China Economist at Capital Economics. However, a plunge of 33 percent in imports from North Korea last year — including a 81.6 percent drop in December — will likely help temper Trump’s anger. The president has connected the two issues a number of times.The December data show China has implemented a series of UN Security Council resolutions this year, targeting the North’s most profitable exports.In 2016, China accounted for roughly 90 percent of the North’s trade, with the secretive country’s coal and iron exports bringing in hundreds of millions of dollars for the regime.Published in Daily Times, January 13th 2017.