China’s economy keeps booming as the rest of the world suffers: Beijing enjoys an 18% export boom as its trade surplus grows to near-record $535billion
- Beijing hailed ‘outstanding achievements in foreign trade’ after an export boom
- Exporters took advantage of global shutdowns and demand for face masks
- Trade surplus with the US is 15 per cent higher than 2017 when Trump took office
China enjoyed an 18 per cent export boom in December and saw its trade surplus with America widen during 2020 as the country where the pandemic began continues to enjoy its economic rebound.
Beijing hailed its ‘outstanding achievements in foreign trade’ as customs data showed exports surging to $282billion in December and rising 3.6 per cent to $2.6trillion over the whole year.
While other top economies such as the US, Britain and Germany saw their GDP take a dramatic downward turn in 2020, China enjoyed a projected 1.8 per cent growth – making it the only OECD country to see an expansion.
The US economy was projected to shrink by 3.7 per cent, the eurozone’s by 7.5 per cent and Britain’s by 11.2 per cent in the year of the pandemic.
After China’s early lockdowns brought the virus epidemic to a standstill within its own borders, factories re-opened and the country’s exporters benefited from global demand for masks and medical supplies.
Exporters have also grabbed market share from foreign competitors still living under tough lockdown restrictions after cases rebounded in most of the West.
China’s Communist rulers have touted their success in combating the pandemic, with China the only one of the world’s eight richest countries to enjoy economic growth in 2020, according to these OECD figures
China’s strong export figures saw its politically volatile trade surplus rise to $535billion, one of the highest ever reported – with a 7.1 per cent rise in its surplus with America.
Exports to the US rose by 7.9 per cent to $45billion despite tariff hikes on most Chinese goods by the Trump administration, which has been at loggerheads with Beijing over a long list of issues.
Imports of US goods rose by 9.8 per cent to $14billion, boosted by Beijing’s promise to buy more American soybeans, natural gas and other products.
The figures show that China’s trade surplus with America has widened by 15 per cent since Trump took office in 2017.
Even with Trump leaving office next week, analysts expect few changes in the US-China relationship due to widespread frustration in Washington with China’s record on trade, human rights and technology theft.
The two governments have also clashed over China’s security crackdown in Hong Kong and its handling of the pandemic.
Beijing promised to buy more American exports in a ‘Phase 1’ agreement last January aimed at ending the tariff war.
The two countries agreed to postpone further planned tariff hikes on each other’s goods, but penalties on billions of dollars of imports remain.
China initially fell behind on meeting those commitments but started to catch up as demand rebounded.
Meanwhile, China’s global exports surged in December were 18 per cent higher than a year earlier, reaching $282billion.
Customs spokesman Li Kuiwen said that shipments of electronics rose, with increases seen in notebook computers and household appliances, as well as medical instruments and equipment.
A container ship prepares to leave a port terminal at Lianyungang today as China hailed its trade success during the year of coronavirus
China exported 224billion masks from March to December, Li added, nearly 40 masks for every person outside of China.
Iris Pang, ING chief economist for Greater China, said that China’s exports likely did well because ‘other exporters for most of the year had been in difficult positions because of Covid-19’, shifting more orders to China.
‘The other thing is, during Covid-19, some commodity prices went down and affected the value of what China imported,’ she said.
Imports rose by 6.5 per cent to $204billion, reflecting a rebound in consumer demand after the government reopened factories, shopping malls, offices and auto dealerships.
Also in 2020, exports to Europe rose 6.7 per cent to $39 billion despite anti-virus controls that shut down travel and business in major markets.
‘In 2020, China made outstanding achievements in foreign trade, which did not come easy,’ said a statement by the General Administration of Customs of China.
It warned against complacency, saying the global economic situation ‘is still grave and complex.’
Exporters’ advantage over foreign rivals is expected to fade as vaccines bring an end to the pandemic in the rest of the world, while demand for medical goods should also recede.
‘The current strength of exports is unlikely to be sustained indefinitely,’ said Julian Evans-Pritchard of Capital Economics in a report.
He said imports ‘are likely to drop back’ as the government reduces high spending and other support for economic activity.
‘With the pandemic under control in China, factories and export-oriented companies have resumed normal operations earlier than most other countries, allowing China to meet global demand better,’ said Axi strategist Stephen Innes.
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