China trade surplus reached record in 2021 despite trade war,Recovering demand in U.S. and Europe plus ASEAN supply woes boosted exports

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China trade surplus reached record in 2021 despite trade war
Recovering demand in U.S. and Europe plus ASEAN supply woes boosted exports

The Yantian port in Shenzhen. Despite a trade war with Washington and its allies, vaccination drives in the U.S. and Europe helped consumer purchases of Chinese goods recover. © Reuters
IORI KAWATE, Nikkei staff writerJanuary 14, 2022 12:48 JST

BEIJING -- China's trade surplus in 2021 reached $676.4 billion, the largest ever and up about 30% from the previous year, the country's General Administration of Customs said on Friday.

China trade surplus reached record in 2021 despite trade war

Recovering demand in U.S. and Europe plus ASEAN supply woes boosted exports

asia.nikkei.com

 

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China’s Trade Surplus Hit Record in 2021—With Exports Jumping 30% Amid Pandemic Demand​

An aerial photo taken on Jan. 2, 2022 shows large container ships loading and unloading at the Yangshan Deep water Port in Shanghai.
Lu Hongjie–Costfoto/Future Publishing/Getty Images

BY JOE MCDONALD/AP

JANUARY 14, 2022 12:09 AM EST
(BEIJING) — China’s politically volatile global trade surplus surged to $676.4 billion in 2021, likely the highest ever for any country, as exports jumped 29.9% over a year earlier despite semiconductor shortages that disrupted manufacturing.

The country’s monthly trade surplus in December swelled 20.8% over a year earlier to a record $94.4 billion, customs data showed Friday.

China piled up a series of monthly export surpluses in 2021 but they prompted less criticism from the United States and other trading partners than in earlier years while their governments focused on containing coronavirus infections.

Exports rose to $3.3 trillion in 2021 despite shortages of processor chips for smartphones and other goods as global demand rebounded from the coronavirus pandemic. Manufacturers also were hampered by power rationing in some areas to meet government efficiency targets.

The surplus with the United States, one of the irritants behind a lingering U.S.-Chinese trade war, rose 25.1% in 2021 over a year earlier to $396.6 billion. Trade envoys have talked since President Joe Biden took office in January but have yet to announce a date to resume face-to-face negotiations.

Exports to the United States gained 27.5% over 2020 to $576.1 billion despite tariff hikes by Biden’s predecessor, Donald Trump, that still are in place on many goods. Chinese imports of American goods rose 33.1% to $179.5 billion.

In December, China’s monthly trade surplus with the United States rose 31.1% over a year earlier to $39.2 billion. Exports to the U.S. market rose 21.1% to $56.4 billion while imports of American goods edged up 3.3% to $17.1 billion.

This month, China’s global export volumes are likely to weaken due to congestion at ports where anti-coronavirus restrictions are imposed and to changes in global demand as shippers clear backlogs, said Julian Evans-Pritchard of Capital Economics.

“We’d still bet on export volumes being lower rather than higher by the end of this year,” said Evans-Pritchard in a report.

Chinese imports in 2021 rose 30.1% to $2.7 trillion as the world’s second-largest recovery rebounded from the pandemic.

Economic growth weakened in the second half of the year as Beijing carried out a campaign to reduce what it sees as dangerously high debt in the real estate industry, but consumer spending was above pre-pandemic levels.

Manufacturing activity edged higher in December but new export orders contracted, according to survey earlier by the government statistics bureau and an industry group, the China Federation of Logistics & Purchasing.

Chinese exporters benefited from being allowed to resume most normal business in early 2020 while foreign competitors faced anti-coronavirus restrictions on travel and trade. That advantage carried into 2021 as other governments renewed controls in response to the spread of new virus variants.

Earlier, forecasters said Chinese exporters would benefit from the spread of the latest variant, omicron, which Beijing appeared to be keeping out of the country. More recently, however, China has responded to outbreaks within its own borders by imposing travel restrictions on major cities including Tianjin, a manufacturing center where omicron was found.

China’s global trade surplus was a 26.4% increase over 2020, which economists said then was among the highest ever reported by any economy. They said the only comparison as a percentage of the economy’s size likely was Saudi Arabia and other oil exporters during their price boom in the 1970s, but their total revenues were smaller.

The swollen trade surplus has strained the ability of China’s central bank to manage the exchange rate of its yuan, which has risen to multi-year highs against the U.S. dollar as money flows into the country. The People’s Bank of China has tried to limit the ability of banks and other traders to speculate on the currency’s movement.

China’s trade surplus with the 27-nation European Union, its second-largest trading partner, swelled 57.4% in 2021 over a year earlier to $208.4 billion. Exports to the EU rose 32.6% to $518.3 billion while imports of European goods gained 19.8% to $309.9 billion.

In December, China’s trade surplus with Europe widened by 85.9% over a year earlier to $25.1 billion.

China’s Trade Surplus Hit Record in 2021 Amid Pandemic Demand

China’s global trade surplus surged to $676.4 billion in 2021, likely the highest ever for any country, as exports jumped 29.9% over a year earlier.

time.com

 

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China posts record trade surplus

 

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Exports could be key driver for China’s growth as Covid drags down spending, say analysts
PUBLISHED WED, JAN 19 202211:47 PM EST
Sumathi Bala

Exports will continue to drive China’s economy for the rest of the year as the domestic market remains sluggish, according to analysts.

Chinese leaders have indicated for many years that they want to move away from exports as the main source of growth and toward domestic consumption for sustainable economic growth, said Mattie Bekink, China director at the Economist Intelligence Corporate Network.

“But that’s certainly not what’s happened during the pandemic. So China’s economic recovery has largely been dependent upon on return to its old export driven model, while consumption has really lagged,” she told CNBC’s “Squawk Box Asia” on Thursday.

“In 2020, for example, net exports contributed the largest share of Chinese GDP growth since 1997 and consumption is not even recovered yet to its pre-Covid trend, according to China’s National Bureau of Statistics,” Bekink said.

Despite global disruptions of supply chains during the pandemic, China’s trade surplus rose to $676.43 billion in 2021— up from $523.99 billion in 2020, and the highest on record going back to 1950, according to official data from Wind information.

“Exports will still continue to be a very important growth driver for the Chinese economy in 2022,” Zerlina Zeng, a senior credit analyst at CreditSights, told CNBC on Wednesday.

Exports could be key driver for China's growth as Covid drags down spending, say analysts

Despite global disruptions of supply chains during the pandemic, China's trade surplus in 2021 rose to US$676.43 billion.

www.cnbc.com