Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

China’s Soaring Exports Show Strong Demand a Year After Lockdown

Economic IndicatorsMar 08, 2021 11:27
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Bloomberg. Shipping containers next to gantry cranes at the Yangshan Deepwater Port in Shanghai, China, on Monday, Jan, 11, 2021. U.S. President Donald Trump famously tweeted that 2/2

(Bloomberg) -- China’s exports surged in the first two months of the year, reflecting strong global demand for manufactured goods and with figures partly skewed by the low base in 2020 when the economy was in lockdown.

Exports jumped 60.6% in dollar terms in the January-February period from a year earlier, data from the General Administration of Customs showed Sunday, well above the 40% median estimate in a Bloomberg survey of economists. In February alone, exports more than doubled from last year.

The first two months are normally volatile for China’s economic activity because of the week-long Lunar New Year holiday, which fell in February this year. The figures are even more distorted this time around because of the comparison with 2020, when factories and businesses were shut to contain the coronavirus outbreak in the early part of the year. Exports plunged 17.4% in the first two months of last year.

Even with the favorable base effects, the data shows exports continued to benefit from soaring global demand for medical equipment and work-from-home devices, which has helped to underpin China’s V-shaped recovery from the pandemic since the second half of the year.

The customs agency said the strong trade data reflects improving demand in major trading partners like the U.S. and Europe, a domestic recovery that’s fueling import growth, and base effects from last year’s slump.

Travel Restrictions

Exports also benefited from a shorter-than-usual vacation for migrant workers during this year’s Lunar New Year break and the early resumption of factory production. Travel restrictions imposed early in the year prevented many workers from making their annual trip home during the holiday.

“Excluding distortions from base effects, trade growth was still quite solid,” Nomura Holdings (NYSE:NMR) Inc. economists led by Ting Lu wrote in a note. While export growth will likely slow after March as base effects ease, fresh stimulus measures in developed nations, especially in the U.S., “may bolster external demand for Chinese products and partly offset the downward pressure,” they said.

Imports also grew strongly, climbing 22.2% in the first two months of the year from a year earlier, exceeding the 16% gain predicted by economists. A breakdown of the data suggests a divergence between heavy industries and hi-tech sectors, with the latter outperforming, according to Bloomberg Economics.

What Bloomberg Economics Says...

In the longer term though, we see uncertainty for exports in the second half of the year as external demand for working-from-home and anti-epidemic goods may start to slow, alongside the pandemic staying in check. In addition, more export economies would return to the market, potentially leading to more intensive competition in global markets.

-- David Qu, China economist

For the full report, click here.

The value of exports declined to almost $205 billion in February, likely due to the Lunar New Year holiday. However, that was still 155% higher than shipments in the same month in 2020, when China was in lockdown to contain the first outbreak of Covid-19.

The data comes two days after the National People’s Congress, the biggest political meeting of the year, kicked off in Beijing, with the government setting out its economic agenda for coming years. Authorities are targeting growth of more than 6% this year, a relatively conservative goal compared with the 8.4% expansion that economists predict. The government also signaled more restrained monetary and fiscal policy after last year’s pandemic stimulus.

“We expect Beijing to carry out its policy normalization in coming months, although a sharp shift in policies appears unlikely,” Nomura’s economists said.

Other Details

  • The trade surplus reached $103.25 billion in the first two months of the year
  • Trade with the U.S. surged 81.3% in the January-February period from a year earlier, taking the trade surplus to $51.3 billion. For a breakdown of China’s main trading partners, click here
  • A breakdown of commodity imports shows large increases in purchases of steel and natural gas in the two-month period and a plunge in coal

(Updates with decline in value of February exports)

©2021 Bloomberg L.P.

China’s Soaring Exports Show Strong Demand a Year After Lockdown
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email