China’s export growth in 2020 exceeds expectations

China's export growth in 2020 exceeds expectations

In December 2020, China’s exports in US dollars rose by 18.1% year-on-year, and imports increased by 6.5%. Both figures exceeded market expectations-the median export and import estimates surveyed by Reuters were 15% and 5%, respectively.

Affected by the epidemic, China’s exports suffered a sharp setback at the beginning of the year. As the epidemic center shifted to Europe and the United States, China’s exports opened low and went high. At the end of the year, China’s exports continued to maintain a high growth range.

With the start of vaccination, China’s “substitution effect” on the manufacturing capacity of other economies may gradually weaken, but China’s domestic demand may continue to increase. Therefore, analysts predict that the growth rate of exports will further narrow in 2021, but imports will continue to grow.

According to data from the General Administration of Customs of China, although it increased by 18.1% in December last year, it was 3 percentage points lower than in November. However, in terms of growth rate, it is still the second-highest record since February 2018.

While exports have grown substantially, imports have been relatively weak. For the whole year, exports increased by 3.6% year-on-year and imports fell by 1.1%, which further expanded China’s trade surplus, reaching US$535.03 billion, the second highest on record since 1950. The surplus denominated in RMB hit a record high.

It is worth mentioning that last year ASEAN surpassed the European Union to become China’s largest trading partner, with a total foreign trade value of US$684.6 billion, followed by the European Union, the United States, and Japan in order.