China Posts Record Trade Surplus Despite Global Supply Chain Problems | Business and Economy News
China posted a record monthly trade surplus in October as exports increased despite disruptions in the global supply chain.
Exports rose 27.1 percent in dollars last month from a year earlier to reach $ 300.2 billion, data from the General Administration of Customs showed on Sunday. It was the 13th consecutive month of double-digit growth and exceeded economists’ expectations of a gain of 22.8%. Imports rose 20.6%, leaving a trade surplus of $ 84.54 billion.
China’s trade growth has remained well above pre-pandemic levels throughout the year. Its exports through October have already surpassed the whole of 2020.
The strong trade performance supports a Chinese economy that has slowed sharply in recent months due to weak domestic demand caused by a slowdown in real estate, power shortages that have slowed industrial production and weak spending consumption aggravated by sporadic coronavirus epidemics.
Chinese coal imports nearly doubled in October from a year earlier, as Beijing scrambled to cope with power cuts caused by a shortage of raw materials and growing demand for electricity, especially from the share of export-oriented manufacturers.
Imports of natural gas, an alternative to electricity for heating homes, jumped 22% in the first 10 months of the year.
Global trade has hit record highs this year as economies around the world recover from virus-induced lockdowns in 2020. This has strained supply chains in many countries due to shortages of containers and of ships as well as the capacity of ports, including drivers. who deliver goods to retailers.
The outlook for a supply chain crisis may improve, as suggested by falling shipping costs.
China’s exports to the European Union and the United States have grown the fastest among its major trading partners this year, according to customs data.
The country’s trade surplus with the United States, the source of trade tensions between the world’s two largest economies, rose to 2.08 trillion yuan ($ 325 billion) in the 10 months to October, from 1 , 75 trillion yuan a year earlier, in part because of Chinese imports of US soybeans. slowed down due to weather issues in recent months.
Machinery and electrical products accounted for nearly 60% of Chinese exports by value this year, the customs administration said.
Labor-intensive products such as clothing and plastic products accounted for an additional 18%. Products such as appliances, light fixtures and furniture saw the fastest export growth in October, analysts at Goldman Sachs Group Inc. said in a note.
China is the world’s largest source of demand for most commodities due to its industry and construction-driven economy.
Demand for construction-related goods has slowed this year due to the slowdown in the country’s real estate market, with iron ore imports declining in volume in October.
The dollar inflows have supported the Chinese currency this year and increased the government’s foreign exchange reserves, which reached $ 3.22 trillion at the end of October, according to the People’s Bank of China.
Dollars provide China with an important cushion against any future shock to the global economy, even as individual companies like China Evergrande Group struggle to repay their debts.
The country’s strong export momentum will last at least for the next few months, according to a Bloomberg Economics analysis. Demand for Chinese goods could slow if consumers in developed economies continue to shift from consumption of goods to consumption of services, and countries in South and Southeast Asia resume factory production after related shutdowns to the pandemic.
In recent days, the government has warned of “downward pressure” on the economy and pledged measures to stimulate domestic demand, including policies more favorable to small and medium-sized enterprises.
He pledged not to use the housing market to provide temporary stimulus, and the central bank has remained cautious, sticking to short-term loans to keep interbank liquidity stable. Bank reserve requirements have remained unchanged since July and key interest rates have remained stable since last year.