China’s Trade Surplus Hits Record as Pandemic Fuels Exports

© Reuters.

(Bloomberg) -- China’s exports continued to expand at a strong pace in December, helping to underpin the economy’s recovery. Growth in imports accelerated.

• Exports grew 18.1% in dollar terms in December from a year earlier, while imports rose 6.5%, the customs agency said Thursday. That left a trade surplus of $78.17 billion for the month, the highest on record. Economists had forecast that exports would increase by 15% while imports would rise by 5.7%

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 likely eased after a bumper month in November, while a recovery in global growth helped to support momentum, Goldman Sachs Group Inc (NYSE:GS). economists said before the data release. Import growth likely rebounded because of more working days in December, they said
• 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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