Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
China’s export boom continued into December, pushing its trade surplus to a record high in the month and strengthening the already best-performing major economy in the world.
Fueling the proliferation of shipments is an insatiable global hunger for home working technology and medical equipment as Covid-19 continues to grow in many places around the world. The demand is so strong that it contributes to one bottleneck in ports as manufacturers complain about a shortage of sea containers and rising costs.
Record surplus
The strongly growing demand for Chinese goods is pushing the surplus to a record
Source: General Customs Administration of China
Early virus control last year allowed Chinese factories to capitalize on global demand while trading rivals ran into trouble. That export momentum is expected to continue even as vaccines are rolled out to stem the spread of the virus and restore industrial production in the US and Europe.
The peak year also underscores China’s role as the fulcrum of global supply chains, even as political tensions with the US and other trade rivals dormant.
“The key point is that China’s exports have remained surprisingly resilient despite the return of the second wave in the major economies,” said Michelle Lam, Greater China economist at Societe Generale SA in Hong Kong.
Trade data showed rising demand across the board:
- Exports grew 18.1% in dollars in December from a year earlier – softer than November’s 21.1% increase – while imports grew 6.5%, both of which exceeded economists’ expectations
- The trade surplus of $ 78.2 billion for the month was higher than the average estimate of $ 72 billion in a Bloomberg poll of economists. For the full year, the trade surplus was $ 535 billion, up 27% from 2019 and the highest since 2015
- Exports to the US are up 34.5% in December from a year earlier, while imports of US goods are up 47.7%, the strongest since January 2013. Click here for a breakdown of Chinese exports by country, and here for entry
- For the full year, the trade surplus with the US was $ 317 billion, 7% higher than in 2019
- On face masks alone, factories exported the equivalent of almost 40 masks for every person in the world outside of China, customs said
“Demand for Chinese goods may remain strong in the coming months due to 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 outperformance will inevitably diminish as the virus is contained in major markets, including the US and Europe, and industrial production recovers, he added.
What Bloomberg’s 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 should increase in the first quarter, partly due to stronger US demand from the expected economic aid package.
– David Qu, economist in China
For the full report, look here
Li Kuiwen, an official with China’s General Customs Administration, said the trade surplus may be preserved growth this year, supported by an expected global economic recovery and stable domestic growth.
Jian Chang, chief China economist at Barclays Plc in Hong Kong, said the data supports regional evidence from South Korea and Vietnam of soaring demand.
“The external recovery has continued,” said Chang. “Chinese manufacturers have flexibly adapted their production lines to produce goods that meet the demands of the new Covid era.” Both pandemic and non-pandemic goods are growing strongly, she said.
Read more: China has made 40 face masks for everyone around the world
The data is unlikely to change the central bank’s stance of phasing out monetary stimulus, but without a sharp turn in policy, Chang said, adding that an interest rate cut or hike is unlikely to come this year.
Overtaking the lead
The countries of Southeast Asia became China’s most important trading partner in 2020
Source: General Customs Administration of China
The numbers also showed shifts in China’s trading partners last year, with the 10-member bloc of Southeast Asian nations rising to the No. 1 spot, followed by the European Union and the US.
– Assisted by James Mayger, Lin Zhu, Enda Curran, Lucille Liu and Ailing Tan