China 2020 exports up despite virus, surplus surges to US$535b
China’s exports rose in 2020 despite pressure from the coronavirus and a tariff war with Washington, boosting its politically volatile trade surplus to US$535 billion, one of the highest ever reported.
Exports increased 3.6 per cent over 2019 to US$2.6 trillion, an improvement on the previous year’s 0.5 per cent gain, customs data showed on Thursday. Imports edged down 1.1 per cent to just over US$2 trillion, but growth was strong in the second half after China became the first major economy to revive following the pandemic.
Exports to the United States rose 7.9 per cent over 2019 to US$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 US goods rose 9.8 per cent to US$13.5 billion, boosted by Beijing’s promise as part of a truce in that conflict to buy more American soybeans, natural gas and other exports.
China’s exporters benefited from the relatively early reopening of its economy and demand for masks and other Chinese-made medical supplies.
Exporters have taken market share from foreign competitors that face still antivirus curbs, but that advantage is expected to fade 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 said imports “are likely to drop back” as the government reduces high spending and other support for economic activity.
Global exports surged 18.1 per cent in December over a year earlier to US$281.9 billion. Imports rose 6.5 per cent to US$203.7 billion, reflecting a rebound in Chinese consumer demand after the ruling Communist Party reopened factories, shopping malls, offices and auto dealerships.
December exports to the United States were US$4.6 billion. Imports of American goods were US$1.6 billion, giving China a US$3-billion surplus.
“In 2020, China made outstanding achievements in foreign trade, which did not come easy,” said a statement by the General Administration of Customs of China. It warned against complacency, saying the global economic situation “is still grave and complex”.
The election of Joe Biden as President of the United States has raised questions about the future of Donald Trump’s fight with Beijing. Economists and political analysts expect few changes due to widespread frustration in Washington with China’s record on trade and human rights, and complaints about technology theft and spying.
Beijing promised to buy more American exports in the Phase 1’ agreement last January aimed at ending the tariff war. The two governments agreed to postpone further planned tariff hikes on each other’s goods, but penalties on billions of dollars of imports remain.
China fell behind on meeting those commitments, but started to catch up as demand rebounded.
China is on track to be the only major economy to grow in 2020, while activity in the United States, Europe and Japan falls.
The world’s second-largest economy shrank by 6.8 per cent from a year earlier in the first three months of 2020. Growth rebounded to 3.2 per cent in the second quarter and accelerated to 4.9 per cent in the three months ending in September.
Chinese imports are growing faster by volume than by value because prices of oil and other commodities sank after antivirus curbs on travel and business depressed global demand.
Also in 2020, exports to Europe rose 6.7 per cent to US$39.1 billion, despite antivirus controls that shut down travel and business in major markets. Imports of European goods rose 2.3 per cent, giving China a surplus of US$13.3 billion.