China’s trade surplus hit its highest monthly level on record in December, as the country’s exports continued to climb during the coronavirus pandemic.
Exports rose 18.1% in dollars last month, while imports rose 6.5%, pushing the trade surplus to a record $ 78 billion. Both exports and imports have exceeded forecasts by economists polled by Bloomberg.
Chinese exports have benefited from increased demand for medical and foreclosure-related products at a time when global trade is under intense pressure and other major economies are struggling to cope.
This surge in trade helped boost the Chinese economy, which quickly recovered from the initial effects of the pandemic. Gross domestic product data that will be released early next week is expected to show the Chinese economy grew 2.1% last year.
Li Kuiwen, spokesperson for the customs administration, said Thursday that China’s trade was “resilient” and “full of potential,” but also stressed the uncertainty following the spread of the coronavirus.
Strong export growth, including double-digit increases for three consecutive months, persisted despite a strengthening renminbi, which this month broke above the 6.5 level against the dollar since the first time since 2018.
Supported by the country’s economic recovery and the lure of higher interest rates, foreign investors have been rushing to buy Chinese assets over the past year. This has led to inflows of around 1 Rmb1tn ($ 155 billion) in 2020 through Hong Kong programs that connect overseas buyers to the mainland. The Chinese stock market hit this month highest level since the global financial crisis.
As China’s market share in global trade surged in the middle of last year due to its rapid resumption from the pandemic, analysts have suggested it could decline as other countries recover. .
“As the pandemic is brought under control, production increases elsewhere and consumers shift to greater consumption of services, we believe China will face more competition,” Tao Wang, head of research in Asian economics at UBS.
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But she added that a strong global recovery is still expected to support China’s export growth of around 10 percent this year.
Imports, which in September hit their highest ever dollar figure, have now increased for four consecutive months. The recovery led by Chinese industry has fueled demand for raw materials. Imports of iron ore reached 1.17 billion tonnes in 2020, up 9.5% from the previous year.
Additional reporting by Wang Xueqiao in Shanghai