Fueled by strong global demand, China’s trade surplus scaled new heights in December, official data reveals.
Record Trade Balance
As revealed by overnight official data, the trade balance climbed to a record $78.17bn in December, from November’s revised $75.4bn. This figure confounded the expectations of most experts and economists who had expected a decline to around $72bn. It’s also the highest for over 13 years.
The trade balance for the year experienced a jump of about 57% in b2019, ending at $535bn.
In December, exports rose by 18.1% in dollar terms year-on-year, which was actually lower than the 21.1% increase recorded in November but which was comfortably better than predicted. Imports rose by 6.5%, an improvement in November’s 4.5% and ahead of forecasts.
Sales to the US rose by 34.5%, by 4.3 to the European Union and by 26.9% to Australia. Imports from the EU and the US also rose by 15.5% and 47.7% year-on-year respectively.
Positive Outlook
Regarding the numbers, the senior emerging markets strategist at TD securities, Mitul Kotecha had this to say: “After a surprisingly strong exports performance in 2020, even in the face of US tariffs, the outlook remains positive.”
“Many countries are struggling with supply chain constraints and while China faces greater freights costs and increasing price pressures, it is likely to continue benefiting from exports of stay-at-home goods and medical equipment in the first quarter of 2021, given renewed lockdowns in the US and Europe.”
Taking an opposing view, Pantheon Macroeconomics opined that exports “were not as strong as the headline suggests.” Chief Asia economist, Freya Beamish said: “We reckon the adjusted surplus remains in its downward trend, falling to around $41bn in December from November’s $51bn. We reckon the downward trend in the adjusted surplus will continue, as commodity price gains feed through, while exports look exposed to the renewed Covid-19 outbreaks across the globe.”
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