China Supply Chain Latest: China Trade Surplus Hits a Record

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China Trade Surplus Surges to Record as Exports Accelerate​

China’s monthly trade surplus soared to a record $97.9 billion in June as exports picked up after the easing of anti-virus controls that shut down Shanghai and disrupted trade.


By Associated Press

July 13, 2022, at 4:34 a.m.

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FILE - Cars and trucks for export are parked at a port in Yantai in eastern China's Shandong Province, Tuesday, Jan. 4, 2022. China’s monthly trade surplus soared to a record $97.9 billion in June as export growth accelerated following the easing of anti-virus controls that temporarily shut down Shanghai and disrupted trade. (Chinatopix via AP, File) THE ASSOCIATED PRESS

By JOE McDONALD, AP Business Writer
BEIJING (AP) — China’s monthly trade surplus soared to a record $97.9 billion in June as export growth picked up after anti-virus controls that shut down Shanghai were lifted and shippers moved a backlog of cargo.

Exports rose 17.9% over a year ago to $331.2 billion, up from May’s 16.9% growth, customs data showed Wednesday. In a sign of Chinese economic weakness, imports rose just 1% to $233.3 billion, pushing up the trade surplus by 90% from a year ago.

Imports from Russia, mostly oil and gas, rose 56% over a year ago as Beijing took advantage of price cuts offered by the Kremlin after Washington and Europe suspended most of their own purchases to punish Moscow for its invasion of Ukraine.

China’s trade already was depressed by weak global demand before Shanghai, site of the world’s busiest port, and other cities shut down starting in late March. Cargo handling is back to normal, but economists warn the shock will be felt abroad for months.

“Exports rebounded strongly as shipping bottlenecks eased,” said Julian Evans-Pritchard of Capital Economics in a report. “But we think this may be the last hurrah for China’s pandemic export boom before shipments drop back on cooling demand.”

Weak import demand reflects a slump in construction, a major customer for foreign iron ore and other raw materials, after the government launched a crackdown on debt that has chilled the vast real estate industry.

Forecasters have cut estimates for China’s economic growth to as low as 2% this year, well below the ruling Communist Party’s target of 5.5%.

China’s economy grew by a weak 4.8% over a year earlier in the quarter ending in March. That was an improvement over the 4% rate in the final three months of 2021.
Some believe it shrank in the quarter ending in June before beginning a gradual recovery. Surveys show that might be under way as manufacturing and service activity accelerates.

If that lasts, “the outlook for the second half of 2022 is for stronger imports,” Rajiv Biswas of S&P Global Market Intelligence said in a report.

Exports to the United States surged 19.3% over a year earlier to $56 billion despite lingering tariff hikes in a trade war over Beijing’s technology ambitions. Imports of American goods edged up 1.7% to $14.6 billion.

China’s politically volatile trade surplus with the United States widened by 26% from a year earlier to $41.4 billion. It was among irritants that prompted then-President Donald Trump to launch the trade fight and hike import taxes.

Envoys from the two governments have talked by phone and video link but have yet to announce a date to resume face-to-face negotiations.

Exports to the 27-nation European Union rose 17.1% from last June to $50.5 billion, while imports of European goods climbed 9.7% to $25 billion. China’s trade surplus with Europe widened by 65% to $25.4 billion.

Imports from Russia rose 56% over a year ago to $9.7 billion.

China’s growing purchases of Russian energy are irritating Washington and its allies but don’t violate sanctions on Moscow.

Beijing declared ahead of the attack that it had a “no limits” friendship with Moscow. It criticizes the sanctions but has avoided helping Putin for fear of losing access to Western markets and the global banking system.

The Biden administration last month accused five Chinese companies of dealing with the Russian military before the Feb. 24 invasion. They added them to a trade blacklist but officials did not say if they were accused of supplying goods after the attack.

Last year, China bought 20% of Russian crude exports, according to the International Energy Agency.

 

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China June trade surplus with U.S. widens to $41.4 bln, surges 19.3% -customs date​


Reuters

Publishing date:
Jul 13, 2022

BEIJING — China’s trade surplus with the United States widened to $41.4 billion in June, compared with a $36.1 billion surplus in May, Reuters calculations based on customs data showed on Wednesday.


 

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India’s trade deficit with China widens as commodity prices fall​

India’s exports to China contracted about 31 percent to $3.07 billion while imports climbed 12.8 percent to $15.39 billion​

TINA EDWIN

JULY 13, 2022 / 01:59 PM IST

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Trade data for April and May show that India’s exports to China contracted about 31 percent to $3.07 billion while imports climbed 12.8 percent to $15.39 billion (Representative Image: Shutterstock)

India’s trade deficit with China widened sharply in the first two months of the current financial year as imports grew and exports fell.

Exports contracted because of a sharp decline in commodity prices as global recession fears grew. Sluggish Chinese demand amid COVID-19 restrictions contributed to the decline. Specifically, iron ore and copper exports slumped.


Trade between the two countries grew a mere 2 percent in April-May 2022 from a year ago, compared to a rapid 34 percent rise in the trade between India and the United States. Country-level trade data for June had not been published at the time of writing this report.


Trade data for April and May show that India’s exports to China contracted about 31 percent to $3.07 billion while imports climbed 12.8 percent to $15.39 billion. Petroleum product exports grew as private refiners stepped up overseas sales to offset losses from selling domestically during those months.

This made petroleum products the top export to China, displacing iron ore. The rise in the value of petroleum product exports was small compared to the decline in exports of iron ore and copper.

India’s exports of iron ore to China, in value terms, soared when global prices climbed. Prices rose to an all-time high of $220 per tonne in July 2021. Prices slid below $100 a tonne in November and then rebounded early this year. Global prices have eased again and iron ore is trading at about $100 a tonne.

There were other changes in India’s exports to China. While cotton, iron and steel, aluminium products and telecom instruments were among the top exports in 2021-22, none of these figured in the top 10 exports of the current financial year’s first two months.

They were replaced by items such as non-basmati rice, castor oil and residual chemicals, data compiled by the Director-General of Commercial Intelligence and Statistics in the Ministry of Commerce and Industry show.

Import growth was led by a sharp increase in the value of organic chemicals entering the country. Other top import items such as electronic components, computer hardware, telecom instruments and consumer electronics also rose.

All these items contributed to the widening of the trade deficit and there weren’t any significant changes in the composition of the top items in the import basket.

Indeed, India’s balance of trade with China was most adversely affected by the imports of electronics components, organic chemicals, computer hardware and telecom instruments, all of which together contributed nearly $5 billion to the deficit, trade data show.

Policy interventions of the last few weeks and a continuing slide in commodity prices are likely to lead to more export contraction in the months ahead.

Exports of petroleum products and iron ore have become unattractive after export taxes were imposed on them. Given the composition of the import basket and the likely surge in consumer demand in the ensuing festival season that begins later next month, the inflow of Chinese goods can be expected to remain strong.

 

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China's Exports to the 27-nation European Union rose 17.1% from last June to $50.5 billion, while imports of European goods climbed 9.7% to $25 billion. China’s trade surplus with Europe widened by 65% to $25.4 billion.
 

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South Korea's Trade Deficit with China Growing
By Jung Suk-yee
July 12, 2022, 14:46

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South Korea suffered a trade deficit of US$5.5 billion with China in the first 10 days of July.

South Korea’s trade deficit with China is growing. China has been a big importer of Korean products for the past 30 years. But Korea’s exports to China are declining as Korea’s industrial competitiveness weakens and the global supply chain goes through reorganization. Some experts predict that Korea’s trade deficit with China will be prolonged.

The Korea Customs Service said on July 11 that Korea’s exports from July 1 to July 10 increased 4.7 percent on year to US$15.8 billion and Korea’s imports increased 14.1 percent to US$21.3 billion during the same period. Both exports and imports increased, but the trade balance posted a deficit of US$5.5 billion due to a relatively larger increase in imports.

In particular, Korea’s exports to China fell 8.9 percent during the 10-day period, while Korea’s imports rose 13.2 percent, leading to a deficit of more than US$800 million. In June, Korea’s exports to China fell 0.8 percent year-on-year to US$13 billion. On the other hand, imports surged 24.1 percent to US$14.2 billion, recording a deficit of US$1.2 billion.

Korea’s trade with China turned to the red in the second quarter. After losing US$14 million in August 1994, Corporate Korea continued to post a monthly surplus until April 2022. However, it posted a deficit of US$1.1 billion in May, the first deficit in 28 years. The cumulative trade balance with China this year still remains in the black –- a surplus of US$4.2 billion. However, if the latest trend is maintained, the balance may turn into a deficit in the second half of the year.

Both internal and external factors contributed to Korea’s trade deficit with China. Analysts cite an improvement in Chinese manufacturers’ technology, the U.S.-China trade conflict, the reorganization of the global supply chain and China’s lockdowns against the spread of the COVID-19 virus.

China accounted for 23.4 percent of all Korean exports as of May 2022, maintaining the status of the largest importer of Korean products. The share of Korea’s exports to China in Korea’s total exports fell from 26.8 percent in 2018 to 25.3 percent in 2021. Experts say that Korea’s exports to China continued to drop due to China’s slowing economic growth and transition to a domestic demand-oriented growth strategy.

 

xizhimen

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Korea enjoyed massive trade surplus with China for over 30 years already, it's quite surprising that now it turned negative for Korea.
 

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