China's exports fell more than expected in April while imports rose, official data showed Wednesday ahead of high-stakes talks aimed at resolving a trade war with the United States.

The world's two leading economies face a possible make-or-break moment when top negotiators meet in Washington this week following months of fraught talks.

US President Donald Trump has upped the ante with plans to more than double tariffs on $200 billion in Chinese goods on Friday, the last day of a two-day visit by President Xi Jinping's point man Vice Premier Liu He.

The trade war has battered shipments between the economic giants.

In April China's exports across the Pacific fell 13.2 percent from a year earlier, while imports from the US fell 25.7 percent, according to the data from China's customs administration.

The politically sensitive trade surplus with the US remained large, widening to $21 billion last month from $20.5 billion in March. Last year it hit a record $323.3 billion.

Global markets have taken a beating this week as investors grow increasingly concerned that the China-US trade deal, which last week appeared all but ready to sign, could fall through.

US negotiators accused Beijing of reneging on commitments made during months of talks focusing on clamping down on theft of US technology and reducing China's massive subsidies.

"If Trump's threat becomes reality, it will be a game changer for the global economy," said Steve Cochrane, chief APAC economist at Moody's Analytics, adding the worst-case scenario would result in a US recession and a rapid reduction of growth in China.

Tepid global demand for China's goods have heightened the risk for Beijing, which posted 6.4 percent economic growth in the first quarter, having decelerated every quarter last year.

- 'Downbeat prospects' -

China's exports to the world sank 2.7 percent on-year last month while imports rose 4.0 percent, producing a trade surplus of $13.8 billion.

Economists polled by Bloomberg had expected a 3.0 percent rise in exports with imports projected to fall 2.1 percent.

"Today's exports data support our view that there is real risk of double dip in growth, and Beijing cannot afford to stop easing yet," said Lu Ting, an economist at Nomura bank.

"With the rapid escalation of the trade conflict with the US, we believe Beijing will likely step up easing measures again," he wrote in a note.

Beijing has moved to jumpstart its cooling economy this year with massive tax cuts and fee reductions, and a targeted reduction in the amount of cash that small and medium-sized banks must hold in reserve announced on Monday.

But the central bank has yet to cut interest rates.

In March China's exports unexpectedly jumped 14.2 percent, and analysts caution it is difficult to compare trends at the start of the year owing to the Chinese New Year holiday, which fell in February.

Over the first four months of the year China's exports rose only 0.2 percent on-year while imports dropped 2.5 percent, both down from the final quarter of last year.

"Even if a last-minute deal is struck this week to avoid further tariffs, the downbeat prospects for global growth will probably mean that export growth remains subdued," said Julian Evans-Pritchard of Capital Economics.

Data last week showed China's factory activity softened in April, with the new export orders sub-index rising from March, but remaining in contraction territory.

Thorny issues remain in US-China trade negotiations
Washington (AFP) May 7, 2019 - The United States and China are due to resume negotiations on Thursday in Washington to try to end their trade war but central to the dispute between the world's top economic powers is dominance in future high-tech industries.

What are the main sticking points in the talks?

- Opening of the Chinese market -

US President Donald Trump demands that China further open its market to American products by eliminating barriers to reduce the colossal trade deficit with Beijing: $378.7 billion in 2018, and $419.3 billion for manufactured goods alone.

Beijing already committed to buying more US soybeans, which are used to feed pigs, as well as products from the energy sector, but it would take a major increase in imports to reduce the deficit.

- Intellectual property -

The United States has for years accused Beijing of the rampant theft of American know-how, including through forced technology transfers, and Trump's team has made technology and copyright protection a central element of the negotiations.

Beijing has required foreign companies to form joint ventures in order to do business in China, which allows technology and other intellectual property to be acquired by their local partners.

China has several times over the years promised to clamp down on IP theft, including taking steps to reorganize the ministries and agencies responsible for protecting intellectual property rights. But Washington said the efforts "fail to make the necessary fundamental changes," according to a recent report by US Trade Representative.

- Investments -

The protection of intellectual property also relates to Chinese investments in the United States. US authorities have gone after Chinese nationals accused of stealing know-how from their American employers, and the Committee on Foreign Investment in the United States has prevented Chinese takeovers of key US firms, claiming they posed national security risks.

- Hacking -

Washington also is calling for an end to cyber theft. In December, for example, US authorities accused China of hacking into a database of the Marriott hotel giant containing information on 500 million customers.

However, Beijing is reluctant to agree to any wording in a trade deal that acknowledges responsibility for any theft of technology or hacking.

- Subsidies -

Washington is calling on Beijing to reduce the massive subsidies provided to the country's state-owned enterprises. But that demand clashes with Chinese ambitions.

Beijing in 2015 launched is "Made in China 2025" development plan to make the country a world leader in high-tech industries, like aeronautics, robotics, artificial intelligence and clean energy vehicles.

Trade experts say Beijing is unlikely to agree to major structural changes.

- Currency manipulation -

The United States has long insisted that China must not use a weaker currency to make its exports more competitive and US Treasury Secretary Steven Mnuchin has said a provision on exchange rates for the yuan (renminbi) will be included in the agreement.

The International Monetary Fund (IMF) estimated in July 2018 that the Chinese currency was "in line with fundamentals," and not undervalued.

The US Treasury likewise has repeatedly refrained from declaring that Beijing manipulates its currency. However, the latest of the semi-annual reports to Congress on currency manipulation is overdue.

- Enforcement mechanism -

Burned by broken promises, the Americans want to put in place mechanisms to ensure China will abide by the terms of any agreement. US Trade Representative Robert Lighthizer had proposed monthly, quarterly and semi-annual meetings to review compliance.

If US companies report any violations of the deal, Washington could hold consultations with Chinese officials, and if no resolution is found, unilaterally impose punitive tariffs.

But whatever the system, it would work both ways, meaning Beijing also would have the option of imposing tariffs as well, a prospect that concerns US businesses.

- Tariffs in place -

Beijing wants to ensure Washington will remove the tariffs Trump imposed on $250 billion worth of Chinese goods. But US Vice President Mike Pence said the fate of the tariffs will depend on whether China complies with the terms of the agreement.

Trade experts say the tariffs likely would be removed in stages.

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US-China trade dilemma: how to hold Beijing's feet to the fire
Washington (AFP) May 5, 2019
US and Chinese officials say a historic deal ending their ongoing trade war could be imminent, but a key question is how can Washington be sure Beijing will live up to its end of the bargain? With up to 100 Chinese officials reportedly expected next week in Washington, with the possibility of unveiling a grand agreement after months of tensions, that question is hanging over the talks. Beijing may make eye-popping offers to buy American energy and agriculture exports as a means of cutting the so ... read more