China’s export shipments are witnessing their fastest growth in three years. As the rest of the world enters a renewed phase of lockdowns amidst a resurgence in coronavirus cases, Chinese companies have capitalized on this worldwide instability, with the country’s exports growing for the sixth month this year.
While imports grew by 4.5% in November, which was lower than the predicted rate of 7%, China’s exports grew by 21.1% from a year earlier and 11.4% in October. The survey conducted by analysts at Bloomberg also reported that this was the highest growth rate since February 2018, when exports grew by 44.5%; this drove China’s trade surplus to US$75.42 billion last month, which is up 102.9% from last year and up from US$58.44 billion in October, as export growth topped imports again.
On the other hand, Vietnam’s exports grew by 12% in the last three months and South Korea saw its outbound shipments rise by 4% in November, gaining in major markets like Europe and the United States (US). Japanese factories also returned to pre-pandemic levels, while Taiwanese exports rose to their highest level since 2018.
This has made economists apprehensive, as East Asian economies have continued to expand even despite the raging pandemic. For example, in the same time period, India’s exports fell by 17.84% during the seven-month period between April and November this year. India’s trade deficit has also decreased, with imports slumping by 33.56%. New Zealand, too, experienced the biggest drop in trade since June 2009, due to a reduction in export prices for dairy, meat, and logs in the September 2020 quarter.
Additionally, on December 1, China’s Export Control Law also came into effect, which has the potential of reshaping China’s export relations with its trading partners and further its economic aspirations. According to The Diplomat, the law also provides for extraterritorial reach as well, implying that China could effectively use the new law to retaliate against American firms for trade restrictions imposed on Chinese companies by the US government.
Beijing and Washington have been embroiled in a trade war since 2018, with retaliatory tariffs from both sides. Differences in trade appeared to have eased when the two states put into place an agreement six months earlier, with China committing to increase imports from the US. However, according to a report by the Peterson Institute for International Economics, China has failed to meet the targets outlined in the agreement. Using official data from China and the US, the report states that China should buy $142.7 billion in American goods by the end of the year. However, in the first half of 2020, China bought less than a quarter of the targeted amount.
China’s Exports Boom While Western Countries Enter New Lockdowns
As much of the world enters a renewed phase of coronavirus-induced lockdowns amid a second wave of infections, China reported a sixth consecutive monthly increase in exports.
December 7, 2020
SOURCE: THE BALANCE