China’s Trade Surplus Hits Record as Pandemic Fuels Exports

(Bloomberg) -- China’s exports continued to expand at a strong pace in December, pushing the trade surplus to a record high in the month and helping to underpin the economy’s recovery.

• Exports grew 18.1% in dollar terms in December from a year earlier, while imports rose 6.5%, the customs agency said Thursday, beating economists’ expectations. That left a trade surplus of $78.17 billion for the month, higher than the $72 billion median estimate in a Bloomberg survey of economists
• For the full year, the trade surplus reached $535 billion, a 27% increase from 2019 and the highest since 2015

Key Insights

• Exports surged last year as the coronavirus and subsequent lockdowns fueled overseas demand for personal protective gear and stay-at-home electronic devices. With the pandemic largely under control domestically, factories were able to resume production earlier than most other places, enabling China to meet rising global demand
• December’s shipments eased from November’s bumper 21.1% expansion. A recovery in global growth helped to support momentum in exports, while imports likely benefited from more working days in December, Goldman Sachs Group Inc. economists said before the data release
• New lockdowns in Europe, the U.S. and elsewhere could continue to spur demand for Chinese-made consumer goods, though they will weigh on the global recovery. China is also battling a new wave of virus cases, with restrictions to contain the infections in some areas already causing disruptions to business activity
• Even so, UBS Group AG’s Wang Tao sees strong export growth in 2021, with more stable U.S.-China relations helping to reduce uncertainty for trade and supply chains, she wrote in a report before the data

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• China’s exports to the U.S. surged 34.5% in December from a year earlier, while imports of American goods rose 47.7%, the most since January 2013. Click here for breakdown of China’s exports by country, and here for imports
• For the full year, the trade surplus with the U.S. was $316.9 billion, 7% higher than in 2019
• The 10-member bloc of Southeast Asian nations became China’s top trading partner, followed by the European Union and the U.S.

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