Chinese exports surge as global demand recovers from virus

Chinese exports surge as global demand recovers from virus
Chinese exports surge as global demand recovers from virus

Beijing: China’s exports surged 60.6 per cent over a year earlier in the first two months of 2021, after factories reopened and global demand started to recover from the coronavirus pandemic.

Exports rose to USD 468.9 billion, customs data showed Sunday, accelerating from December’s 18.1 per cent gain and nearly double the growth expected by forecasters. Imports jumped 22.2 per cent to USD 365.6 billion, up from December’s 6.5 per cent increase.

Chinese authorities combine trade data for the first two months to compensate for fluctuations due to the Lunar New Year holiday, which falls at different times each year in January or February. Factories shut down for up to two weeks, then restock after they reopen.

Exporters benefited from the relatively early reopening of China’s economy after the ruling Communist Party declared victory over the disease last March while foreign competitors still face anti-virus controls.

Forecasters say the Chinese export surge should decelerate as demand for masks and other medical supplies eases and overseas competitors return to global markets. Trade officials have warned that the global situation still is grave and complex.

Exports to the United States soared 87.3 per cent over last year to USD 80.5 billion in January and February despite former President Donald Trump’s tariff hikes imposed in a fight over trade, technology and security. They have been left in place by his successor, Joe Biden, who took office in January.

Economists and political analysts expect few changes under Biden due to widespread frustration in Washington with China’s trade and human rights records and complaints about technology theft and spying.

On Friday, China’s top economic official, Premier Li Keqiang, announced plans to accelerate technology development and reduce reliance on other countries. That threatens to worsen strains with Washington and Europe, which complain Beijing violates its market-opening pledges by shielding its suppliers from competition.

The latest trade figures look especially dramatic compared with early 2020, when the ruling party shut factories to fight the virus and trade plunged.

Then, global exports tumbled 17.2 per cent in 2020’s first two months from the previous year. Exports to the United States plunged 27.7 per cent.

Li announced an economic growth target of “over 6 per cent this year, which should help to propel demand for foreign oil, iron ore, food, consumer goods and other imports.

Beijing promised to buy more American soybeans, natural gas and other exports in the Phase 1 agreement last January aimed at ending the tariff war. The two sides agreed to postpone more tariff hikes, but penalties on billions of dollars of each other’s goods remain.

China fell behind on meeting those commitments but started to catch up as demand rebounded.

This year, China’s global trade surplus for January and February was USD 103.3 billion, compared with a USD 7.1 billion deficit in the same period last year.

Imports of U.S. goods rose 66.4 per cent to USD 29.3 billion. China’s trade surplus with the United States narrowed by 17.7 per cent from the same time last year to USD 20.9 billion.

Exports to the 27-nation European Union rose 62.6 per cent over January and February last year to USD 73.7 billion. Imports of European goods gained 32.5 per cent to USD 45.9 billion.

PTI, March 07, 2021