China’s exports surged at the fastest pace in almost three years in November, bringing the biggest monthly export haul in the country’s history, data released by its customs agency on Monday showed.
Exports grew by 21.1 per cent last month from a year earlier, from 11.4 per cent in October and well above the consensus result of a survey of analysts, conducted by Bloomberg, which predicted 12 per cent growth.
This was the highest growth rate since February 2018, when exports grew by 44.5 per cent. November’s shipments had a total value of US$268 billion, customs data showed, the highest on record.
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This was the sixth consecutive month of export growth, with China’s factories continuing to capitalise on coronavirus lockdowns in the West.
Imports grew by 4.5 per cent in November from a year earlier, down from 4.7 per cent the month before, much lower than the consensus forecast of 7 per cent.
This was the third month of consecutive import growth, but emphasises the persistent gap between industry and consumption in China’s economy. The gap has been evident across China’s economic data, with retail sales also lagging industrial production every month this year.
China’s trade surplus surged to US$75.42 billion last month, up 102.9 per cent from a year earlier and way above the US$58.44 billion rate in October, as export growth outstripped imports again.
The strong trade growth in November came as other parts of the world grappled with severe coronavirus outbreaks, driving up demand for medical gear and lockdown goods made in China.
Tight restrictions on movement and business openings returned across the West in October and November in an effort to contain the virus’ spread.
China’s exports have surged accordingly, sending electronic goods and medical equipment around the world, in a pattern that has been seen over the course of the pandemic.
Shipments of electronic goods surged to US$166 billion last month, a year on year increase of 24.81 per cent. Medical equipment exports soared 38 per cent, plastic products 112 per cent and lighting gear 47 per cent, in a record-breaking month for China’s exporters.
The biggest market for Chinese goods in November was the United States, which bought US$51.9 billion worth, a year on year increase of 46 per cent.
China’s imports of US goods were up 31.5 per cent in the month in which US President Donald Trump lost the election, sending the US trade deficit to US$37.6 billion, up 52 per cent year on year. This was 74.8 per cent higher than in January 2017, when Trump took office, and a higher deficit than at any point of his presidency to date.
Meanwhile, trade with Australia continued to grow strongly, despite the trade dispute that has been snowballing over the course of 2020. China’s exports to Australia were up 20.6 per cent last month, while imports from Australia rose by 8.3 per cent.
China has slapped anti-dumping duties on Australian barley and wine, while informal embargoes have hit other goods ranging from timber and cotton to coal and beef.
Factory surveys in China had pointed to surging export orders. The Caixin-Markit manufacturing purchasing managers’ index (PMI) for November, released last week, surged to a 10-year high amid strong overseas demand.
The official manufacturing PMI rose to its highest point since September 2017, again signalling strong demand for China’s factory goods.
While exports have been a boost for China’s revenues since the end of the first quarter of 2020, some challenges remain.
China has benefited economically from lockdowns overseas, stepping in to replace fallen suppliers or satisfy demand for lockdown goods. It has expanded its share of global exports, but analysts still warn that this demand may not be sustainable, as economic conditions worsen in the West.
“Many Covid-related purchases won’t happen again and we eventually expect a global rotation from goods to services consumption as vaccine availability reduces the need for social distancing,” said Louis Kuijs, Asia-Pacific analyst at Oxford Economics.
“This will weigh on China’s export performance relative to global demand, after the market share gains in 2020.”
Meanwhile, the Chinese yuan is on its longest expansionary streak since 2014, having risen against the US dollar for the past six months. Continued growth could make Chinese exports less affordable for overseas buyers.
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