Chinese exports grew more than expected in December, customs data showed on Thursday, as coronavirus disruptions around the world fuelled demand for Chinese goods even as a stronger yuan made exports more expensive for overseas buyers.
A robust domestic recovery also spurred Chinese appetite for foreign products in December, with import growth quickening from the month prior and beating expectations in a Reuters poll.
Exports rose 18.1% in December from a year earlier, slowing from a 21.1% jump in November but beating expectations for a 15% rise. Imports increased 6.5% year-on-year last month, topping a 5% forecast and picking up pace from November’s 4.5% growth.
Buoyant exports helped drive an impressive rebound in China’s manufacturing sector last year, as the pandemic wreaked havoc abroad. China is expected to be the only major economy to see positive growth in 2020. Exports grew 3.6% over the full year and imports fell 1.1%.
While the pandemic will bring challenges, a reviving global economy and a steady recovery in China’s domestic economy provide a foundation for China to maintain trade growth in 2021, said Liu Kuiwen, customs spokesman, at a briefing.
Going forward, analysts say sustained demand for medical supplies and work-from-home products from coronavirus-hit trading partners should support Chinese exports.
But some worry a rise in raw material prices and in the yuan could squeeze exporters’ profits. The onshore yuan strengthened 6.7% in 2020 — its first annual rise in three years.
“Exports continued to do well last month, as renewed lockdowns abroad ensured the shift in consumption from services to goods persisted in many of China’s trading partners,” said Julian Evans-Pritchard, senior China economist at Capital Economics, in a research note.
But he expected exports and imports to fall later this year as 2020 stimulus runs out and overseas consumption returns to pre-pandemic patterns as vaccines boost a recovery.
“We think trade will remain resilient in the near-term but will soften later this year,” Evans-Pritchard added.
China posted a trade surplus of $78.17 billion in December — the highest reading on Refinitiv records going back to 2007. Analysts in the poll had expected the trade surplus to narrow to $72.35 billion from $75.40 billion in November.
China’s trade surplus with the United States, with which it has waged a bitter trade war in recent years, narrowed to $29.92 billion in December from $37.42 billion in November.
US President-elect Joe Biden has said he will not immediately cancel the Phase 1 trade agreement that outgoing President Donald Trump struck with China nor take steps to remove tariffs on Chinese exports.