China posted a record monthly trade surplus in October as exports surged despite global supply chain disruptions.
Exports rose 27.1% in dollar terms last month from a year earlier to $ 300.2 billion, data from the General Administration of Customs showed on Sunday. That was the thirteenth consecutive month of double-digit growth and it beat economists’ expectations for a 22.8% increase. Imports increased by 20.6%, leaving a trade surplus of 84,540 million dollars.
China’s trade growth has remained well above pre-pandemic levels throughout the year. Its exports until October have already exceeded all of 2020.
Strong business performance is supporting a Chinese economy that has slowed dramatically in recent months due to weak domestic demand caused by a real estate recession, electricity shortages that have slowed industrial production, and weak consumer spending worsened by sporadic outbreaks of the coronavirus.
China’s coal imports nearly doubled in October from the previous year as Beijing scrambled to grapple with power outages caused by shortages of commodities and rising demand for electricity, especially from targeted manufacturers. to export.
Imports of natural gas, an alternative to electricity to heat homes, soared 22% in the first 10 months of the year.
Global trade has been running at record levels this year as economies around the world rebounded from virus-induced lockdowns in 2020. That has put pressure on supply chains in many countries due to shortages of containers and ships, as well as capacity in ports, including drivers. that deliver goods to retailers.
The outlook for the supply chain crisis may be improving, as predicted by falling shipping costs.
China’s exports to the European Union and the United States have grown the fastest among its major trading partners this year, customs data showed.
The nation’s trade surplus with the US, a source of trade tensions between the world’s two largest economies, rose to 2.08 trillion yuan ($ 325 billion) in the 10 months to October from 1.75. trillion yuan a year earlier, in part because Chinese imports from the US soybeans slowed due to weather-related problems in recent months.
Machines and electrical products accounted for nearly 60% of Chinese exports by value this year, the customs administration said.
Labor-intensive products, such as clothing and plastic products, accounted for another 18%. Goods such as appliances, lighting and furniture saw the fastest export growth in October, analysts at Goldman Sachs Group Inc. said in a note.
China is the world’s largest source of demand for most commodities due to its heavy construction industry and economy.
Demand for construction-related goods has slowed this year due to the slowdown in the country’s real estate market, and iron ore imports declined in volume terms in October.
Reserves went up
Dollar inflows have supported the Chinese currency this year and added to the government’s foreign exchange reserves, which rose to $ 3.22 trillion at the end of October, according to the People’s Bank of China.
Dollars offer China an important cushion against future shocks to the world economy, even as individual companies like China Evergrande Group struggle to pay off their debts.
The nation’s strong export push will last at least for the next several months, according to an analysis by Bloomberg Economics. Demand for Chinese products could slow if consumers in developed economies continue to shift away from consumption of goods towards consumption of services, and countries in South and Southeast Asia resume factory production following pandemic-related closures.
In recent days, the government warned of “downward pressure” on the economy and promised measures to boost domestic demand, including more favorable policies for small and medium-sized businesses.
No promise has been made to use the housing market to provide a temporary stimulus, and the central bank has remained conservative and focused on providing short-term loans to keep interbank liquidity stable. Bank reserve requirements have been unchanged since July and official interest rates have been stable since last year.