China’s exports surpassed forecasts during a global pandemic, resulting in a record surplus in trade for the country in December and for the entire of 2021. However, some analysts predict a downturn in overseas shipments in the next few months.
According to figures from the statistics bureau of China, the trade surplus reached $676.43 billion in 2021, which was the biggest since records started to be kept in 1950, up from $523.99 billion in 2020.
China also had a record trade surplus in December, as exports remained strong while import growth dropped dramatically, according to customs statistics released on Friday.
In December, the trade surplus reached $94.46 billion, the biggest level since records began in August 1994.
This was up from a $71.72 billion surplus in November and well above a Reuters poll’s prediction of $74.50 billion surplus.
China’s large trade imbalance with the United States, a major cause of friction between the world’s two largest economies, increased to $39.23 billion in December, up from $36.95 billion the month before but still was well below the year’s peak of $42 billion in September.
China’s commerce ministry said on Thursday that it hopes the US can establish conditions to expand trade cooperation after Chinese purchases of US goods fell far short of benchmarks set in a Trump-era trade accord in the previous two years.
For much of 2021, China’s exports surpassed expectations, but shipments have slowed as an international spike in demand for commodities subsides and rising costs put pressure on exporters.
The impact of the Omicron coronavirus variant on this trend was unknown.
Last month, exports grew 20.9 per cent year over year, topping estimates of a 20 per cent growth but falling short of November’s 22 per cent gain.
The trade statistics bolstered the yuan, which appeared to be on track for its greatest weekly increase in two months.
“Exports remained strong last month but may soften in the coming months amid growing disruptions at ports,” said Julian Evans-Pritchard, senior China economist at Capital Economics, in a note.
China’s health ministry announced a total of 143 local verified Covid-19 cases for January 13, including in Tianjin, a key northern port city.
Exports may already be profiting from Omicron’s disruption of other countries’ supply chains, according to Zhang Zhiwei, chief economist at Pinpoint Asset Management.
“We expect China’s exports to remain strong in Q1 because of resilient global demand and worsening pandemic in many developing countries. Currently the strong exports may be the only driver helping China’s economy,” said Zhang.
The second-largest economy of the world made a remarkable comeback from the Covid-19 pandemic, with its exports aiding it to keep growth afloat as several other sectors struggled, but there are signs that the impetus is fading.
A property slump and severe Covid-19 restrictions could harm the prognosis for 2022, with some experts citing to a decrease in import growth as proof that this is already happening.
Imports increased 19.5 per cent year over year in December, missing expectations of a 26.3 per cent increase and falling drastically from a 31.7 per cent increase in November, according to customs data.
“Imports dropped back sharply, consistent with continued domestic weakness, especially in the property sector,” said Evans-Pritchard.
(Adapted from TheIrishTimes.com)