China’s 2020 exports up despite coronavirus
China’s total exports rose in 2020, with surplus surges up by $535B, despite pressure from the coronavirus pandemic and a tariff war with Washington.
The $535 billion surplus has boosted its politically volatile trade, and it’s one of the highest ever reported. Exports increased 3.6% over 2019 to $2.6 trillion, an improvement on the previous year’s 0.5% gain.
Exports to the United States rose despite tariff hikes on most Chinese goods
Exports to the United States increased by 7.9% over 2019 to $45.2 billion despite tariff hikes on most Chinese goods by the Trump administration in a feud with Beijing over technology and security.
Imports of U.S. goods rose 9.8% to $13.5 billion, increased by Beijing’s promise as part of a truce between the two countries.
December exports to the United States were $4.6 billion. Imports of American goods were $1.6 billion, giving China a $3 billion surplus.
China’s exporters also benefited from the relatively early reopening of its economy and demand for masks and other Chinese-made medical supplies.
Current increase in Chinese exports expected to reduce soon
Chinese exporters have taken market share from foreign competitors that are still battling the coronavirus epidemic, but the advantage is expected to reduce soon as coronavirus vaccines are rolled out and other economies return to normal. Demand for medical goods is also receding.
“The current strength of exports is unlikely to be sustained indefinitely,” said Julian Evans-Pritchard of Capital Economics in a report. He added that imports “are likely to drop back” as the government reduces high spending and other support for economic activity.
The general administration of customs of China seem to be on the same wavelength as Julian. In a recently released statement, the government parastatal warned against complacency, saying the global economic situation “is still grave and complex.”