Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
China’s export boom continued in December, bringing the trade surplus to a record for the month and boosting what is already the world’s largest economy with the best performance.
Fueling the increase in remittances is the insatiable global appetite for work-at-home technology and healthcare equipment, as Covid-19 continues to increase in many places around the world. Demand is so strong that it is contributing to a bottleneck in ports, as manufacturers complain about the scarcity of containers and rising costs.
Record surplus
Rising demand for products from China pushes surplus to a record
Source: General Administration of Customs of China
Early control of virus cases last year allowed China’s factories to capitalize on global demand while their commercial rivals were hurt. This export boost is expected to continue, even with the launch of vaccines to control the spread of the virus and allow the recovery of industrial production in the United States and Europe.
The abundant year also underscores China’s role as the hub of global supply chains, even as political tensions with the United States and other trade rivals have increased.
“The biggest conclusion is that China’s exports have remained surprisingly resilient despite the return of the second wave in major economies,” said Michelle Lam, Greater China economist at Societe Generale SA in Hong Kong.
Commercial data showed growing demand across the board:
- Exports grew 18.1% in dollars in December compared to the previous year – smoother than the expansion of 21.1% in November – while imports increased by 6.5%, exceeding economists’ expectations
- The trade surplus of $ 78.2 billion for the month was higher than the median estimate of $ 72 billion in a Bloomberg survey of economists. Year-to-date, trade surplus reached US $ 535 billion, an increase of 27% compared to 2019 and the largest since 2015
- Exports to the USA increased 34.5% in December compared to the previous year, while imports of American products increased 47.7%, the highest since January 2013. Click here for details of China’s exports by country, and here for imports
- In the year, trade surplus with the US was US $ 317 billion, 7% higher than in 2019
- In face masks alone, factories exported the equivalent of almost 40 masks for every person in the world outside of China, according to the customs agency
“Demand for products from China may remain strong in the coming months with the recent increase in Covid infections in the US and Europe,” said Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered Plc in Hong Kong .
That superior performance will inevitably decline as the virus is controlled in large markets, including the United States and Europe, and industrial production rebounds, he added.
What the Bloomberg economy says …
The data showed that external demand is driving China’s economic recovery, and this is likely to continue in the coming months. Exports are expected to increase in the first quarter, partly due to stronger US demand with the expected economic relief package.
– David Qu, economist from China
For the full report, look here
Li Kuiwen, an official at the China General Administration of Customs, said the trade surplus could keep growing this year, supported by an expectation of recovery in the global economy and stable domestic
Jian Chang, chief economist for China at Barclays Plc in Hong Kong, said the data supported South Korea and Vietnam’s regional evidence of increasing demand.
“The external recovery continued,” said Chang. “Chinese manufacturers flexibly adjusted their production lines to produce goods that meet demand during Covid’s new era.” Both pandemic-related and non-pandemic-related products are growing strongly, she said.
Read More: China made 40 masks for each person worldwide
The data is unlikely to change the central bank from its position to gradually withdraw the monetary stimulus, but without any sudden change in policy, Chang said, adding that an interest rate cut or hike is unlikely this year.
Overcoming leadership
Southeast Asian nations became China’s main trading partner in 2020
Source: General Administration of Customs of China
The figures also showed changes in China’s trading partners last year, with the bloc of ten Southeast Asian countries rising to number one, followed by the European Union and the US
– With the help of James Mayger, Lin Zhu, Enda Curran, Lucille Liu and Ailing Tan