During the coronavirus pandemic in December, China’s exports continued to grow, and China’s trade surplus reached the highest monthly level ever.
Last month, in dollar terms, exports rose by 18.1%, while imports rose by 6.5%, bringing the trade surplus to a record 78 billion US dollars. Both imports and exports exceeded the expectations of economists surveyed by Bloomberg.
As global trade is under tremendous pressure and other major economies are struggling to cope with it, China’s increased demand for medical products and lock-in-related products has benefited China’s exports.
The surge in trade has helped promote the development of the Chinese economy, and China has quickly recovered from the early effects of the pandemic. The GDP data, which is expected to be released early next week, shows that China’s economy grew by 2.1
Despite the appreciation of the renminbi, exports have continued to grow strongly, including double-digit growth for three consecutive months. The exchange rate of the renminbi against the dollar this month exceeded the 6.5 level for the first time since 2018.
Encouraged by China’s economic recovery and the temptation of high interest rates, foreign investors have been eager to purchase Chinese assets in the past year. By 2020, about 10 trillion yuan (US$155 billion) will be inflowed through the Hong Kong plan to connect overseas buyers with the mainland. This month, the Chinese stock market hit its highest level since the global financial crisis.
In the middle of last year, China recovered rapidly from the global influenza pandemic and its market share in global trade soared. However, analysts believe that as other countries recover, China’s trade volume may decline.
Tao Wang, Head of Asian Economics Research at UBS, said: “As the flu pandemic is brought under control, production in other places increases, and consumers turn to more service consumption. We think China will face more competition.”
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But she added that the strong global recovery will still support China’s export growth of about 10% this year.
Imports have risen for four consecutive months, and the imports reached their highest level on record in September. China’s industry-driven recovery has boosted demand for commodities. In 2020, iron ore imports will increase to 1.17 billion tons, an increase of 9.5% over the previous year.
Additional reporting by Wang Xueqiao in Shanghai