China ends 2020 with a record trade surplus when pandemic goods soar

Photographer: Qilai Shen / Bloomberg

China’s export boom continued until December, surpassing the trade surplus to a record high during the month and strengthening what is already the world’s largest economy with the best performance.

Feeding rising shipments is an insatiable global appetite for work-from-home technology and healthcare equipment, as the Covid-19 continues to rise in many parts of the world. Demand is so strong that it is contributing to one bottlenecks in ports, as manufacturers complain about the shortage of shipping containers and higher costs.

Early control of virus cases last year allowed China’s factories to capitalize on global demand while their trade rivals were held back. This boost in exports is expected to continue even as vaccines are developed to domesticate the spread of the virus and allow industrial production to recover in the United States and Europe.

The imposing year also underscores China’s role as a fulcrum for global supply chains, even as political tensions with the United States and other trade rivals warmed.

“The most important thing to take away is that China’s exports have remained surprisingly resilient despite the return of the second wave to major economies,” said Michelle Lam, a Greater China economist at Societe Generale SA in Hong Kong.

Business data showed a growing demand in general:

• Exports grew 18.1% in dollars in December over the previous year, softer than the 21.1% expansion in November, while imports rose 6.5%, both exceeding expectations of economists.
• The trade surplus of $ 78.2 billion for the month was higher than the estimated $ 72 billion average in a survey of Bloomberg economists. Throughout the year, the trade surplus reached $ 535 billion, 27% more than in 2019 and the highest since 2015
• Exports to the United States increased by 34.5% in December over the previous year, while imports of US products increased by 47.7%, the largest amount since January 2013. Click here to break down China ‘s exports by country and here for imports
• Throughout the year, the trade surplus with the US was $ 317 billion, 7% more than in 2019
• Only with facial masks did the factories export almost the equivalent 40 masks for all people in the world outside of China, according to the customs agency

“Demand for Chinese goods may continue to be strong in the coming months with the recent rise in Covid infections in the US and Europe,” said Ding Shuang, chief economist in Greater China and North Asia at Standard Chartered Plc in Hong Kong.

This performance will inevitably exceed as the virus is controlled in large markets, including the United States and Europe, and industrial production recovers, he added.

What the Bloomberg economy says …

The data show that external demand is driving China’s economic recovery, and that it is likely to continue in the coming months. Exports are expected to jump in the first quarter, in part due to strong U.S. demand for the expected economic relief package.

– David Qu, economist from China

For the full report, see here

Li Kuiwen, an official with China’s General Customs Administration, said the trade surplus could be maintained grows this year, supported by an expected recovery of the world economy and stable domestic growth.

Jian Chang, chief Chinese economist at Barclays Plc in Hong Kong, said the data supports South Korea and Vietnam’s regional evidence of booming demand.

“The external recovery has continued,” Chang said. “Chinese manufacturers have flexibly adjusted their production lines to produce products to meet demand through the new Covid era.” He said both pandemic-related and non-pandemic products are growing strongly.

Read more: China made 40 facial masks for all people in the world

The data is unlikely to displace the central bank from its stance of phasing out monetary stimulus, but without any sharp turn in policy, Chang said, adding that a reduction or rise in interest rates is unlikely. interest this year.

The figures also showed changes in China’s trading partners last year, with a ten-member bloc of Southeast Asian nations rising to No. 1, followed by the European Union and the U.S.

– With the assistance of James Mayger, Lin Zhu, Enda Curran, Lucille Liu and Ailing Tan