China said Tuesday it bought twice as many U.S. farm products in the first quarter than a year ago, in a sign the countries are following through with part of the phase one trade agreement despite the coronavirus pandemic.
The Asian giant imported 35.56 billion yuan ($5.08 billion) worth of U.S. agricultural products in the first quarter, according to its customs agency. The volume of soybeans imported also doubled and that of pork increased more than six times, the agency said, while Chinese imports of cotton rose 43.5%.
From a price perspective, China imported 21.88 billion yuan worth of soybeans, twice that of a year ago. Imports of pork were worth 3.04 billion yuan, an increase of 16 times. That of cotton was 1.59 billion yuan, a 17% increase.
The China-U.S. phase one trade agreement is gradually being implemented, China Customs spokesperson Li Kuiwen said Tuesday at a press conference, according to a CNBC translation of his Mandarin-language remarks.
The world's two largest economies signed the agreement in January, temporarily resolving more than 18 months of escalating trade tensions. China agreed that over the next two years, it would buy at least $200 billion more in U.S. goods and services relative to the 2017 level. The projected purchases include at least $32 billion more in agricultural products, with an unspecified amount of soybeans.
However, some have doubted whether China can ultimately fulfill such a high level of purchases. Many also worry that the coronavirus outbreak might hamper the ability of both countries to fulfill the trade agreement.
The disease, officially called Covid-19, first hit China late last year and shut down much of the country's economy in February in an extension of the Lunar New Year holiday. The disease has since spread globally, forcing local governments to enact similar lockdowns in an effort to limit the spread of the virus that's now killed well over 119,000 people around the world.
While Chinese businesses have mostly re-opened in the last several weeks, factories and other companies that rely on exports have been hit by a drop in demand from overseas customers whose businesses are now shut due to the virus.
Chinese exports dropped 17.2% in U.S. dollar-terms in January and February from the first two months of last year, with the decline narrowing to 6.6% in March.
"Since the coronavirus outbreak only got much (more) serious in Europe and North America from late February, its impact on China's exports to those destinations might only show up in Q2, especially April and May," Ting Lu, chief China economist at Nomura, said in a note Tuesday. "We expect China's export growth to plummet to around -30% yoy in Q2."
In the first quarter, overall trade between China and the U.S. fell 18.3% from a year ago to 668.01 billion yuan ($95.43 billion), with Chinese exports to the U.S. falling 23.6% and imports declining 1.3%, the customs agency said.
Mechanical and electrical products accounted for more than 60% of Chinese exports to the U.S. in the first quarter, and marked a decline of 24.1% to 292.57 billion yuan from a year ago.
The export of mobile phones dropped 10.3%, while that of drugs and medical supplies rose 6.3%, according to China Customs.