China’s August imports from U.S. fall 22.5%

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As part of its retaliation, Beijing will begin imposing a 5% tariff on U.S. crude oil from September 1, the first time United States oil has been targeted since the world's two largest economies started their trade war more than a year ago.

The measure would allow an estimated $126 billion in additional loans to businesses facing an economic slowdown.

These could include the first cuts in four years to some key lending rates. Analysts had expected a 2.0% rise in a Reuters poll after July's 3.3% gain.

The 14-month U.S. -China trade war has escalated sharply since May, when talks broke down after Beijing backtracked on earlier commitments to make changes in law to improve intellectual property protections, curb the forced transfer of U.S. technology to Chinese firms and improve U.S. access to Chinese markets. Some 571,000 people entered the labor force in August and almost 590,000 found work, that survey found. USA stocks opened higher after the government reported the jobs data.

August saw dramatic escalations in the bitter year-long trade row, with Washington announcing 15 percent tariffs on a wide range of Chinese goods from September 1. Beijing hit back with retaliatory levies, and let its currency fall sharply to offset some of the tariff pressure.

In a sign of continued pressure on the Chinese economy, Beijing's central bank announced Friday it would cut deposit reserve requirements for banks.

Analyst expectations had been that a falling yuan would offset some cost pressures.

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Last month, China let the yuan slide past the key seven-per-dollar level for the first time since the global financial crisis, and the USA labelled it a currency manipulator.

Beijing is balking at US pressure to roll back plans for government-led creation of global competitors in robotics and other industries.

Meanwhile, accusing a sluggish external demand behind a cascade of calamitous August data including a contraction in export, an economist at Zhong Hai Sheng Rong Capital Management, Zhang Yi said, "Exports are still weak even in the face of substantial yuan currency depreciation, indicating that sluggish external demand is the most important factor affecting exports this year".

In U.S. dollar-denominated terms, China's exports edged up 0.4 percent during the first eight months, while imports declined 4.6 percent from one year earlier.

But exports to Japan and Taiwan were slightly better than the previous month.

The U.S. and China are scheduled to restart negotiations in October in a move to quell the growing trade war as it continues to hamper global economic growth. Imports dropped 5.6% on-year in August, slightly less than an expected 6.0% fall and unchanged from July's 5.6% decline.

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