China’s exports grew at their fastest pace this year in November, with rising global demand for the country’s goods pushing its trade surplus to the highest monthly level on record.
Exports in dollar terms rose by 21.1 per cent last month compared with the same period last year, official data showed on Monday — the fastest rate since February 2018. Economists surveyed by Bloomberg had forecast an increase of just 12 per cent.
China’s rate of export growth has gathered pace in every month since June and by October had already hit its highest level in 19 months. Exports have stoked the country’s rapid recovery from the pandemic and increased its dominance of an uncertain environment for global trade.
China’s trade surplus in November was $75.4bn, the highest on record and well above the $58.4bn recorded in October.
While China’s trade performance stands to benefit from a wider global recovery, the country’s export boom has been supported by voracious international appetite for products resulting from the pandemic and its associated lockdowns, such as personal protection equipment and electronics products.
“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,” noted Louis Kuijs, head of Asia economics at Oxford Economics.
“This will weigh on China’s export performance relative to global demand, after the market share gains in 2020”.
China’s economy expanded by 4.9 per cent in the third quarter year-on-year, with industrial growth powering a rapid recovery from a historic contraction at the start of the year. Consumption, which has previously lagged the wider recovery, has recently shown signs of improvement. Retail sales added 4.3 per cent year-on-year in October.
China’s recovery has also boosted growth in imports, which hit their highest-ever dollar amount in September on the back of strong demand for commodities and electronics parts ahead of US sanctions on tech group Huawei. In November, China’s imports came in below economists’ expectations but grew by 4.5 per cent compared with the same period last year.
In China, the CSI 300 index of Shanghai- and Shenzhen-listed stocks was down 0.7 per cent on Monday despite the positive trade data.
The renminbi, which has gained 6.4 per cent this year on the back of China’s recovery, weakened by 0.2 per cent to Rmb6.5417 per dollar, edging off its strongest level since 2018.
Ken Cheung, chief Asian FX strategist at Mizuho Bank, suggested that “the strong trade figures should help ease PBoC’s [People’s Bank of China] concern over the renminbi’s strength”.
Source: Economy - ft.com
