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BEIJING: China’s exports rose at the fastest pace in nearly three years in November, as strong global demand for goods needed to overcome the pandemic pushed the world’s second-largest economy into a record trade surplus.
A spirited recovery of factories in China following the coronavirus shutdown earlier this year has far outpaced the reopens seen in major trading partners, many of which are still battling outbreaks.
Exports in November were up 21.1% from a year earlier, customs data showed Monday, the fastest growth since February 2018. It also solidly beat analysts’ expectations of a 12.0% increase and accelerated from an 11.4% increase in October.
The strong exports come as the yuan approaches multi-year peaks against the dollar, which would be good news for policymakers concerned about the impact of a weakened dollar on China’s trade competitiveness.
Imports rose 4.5% year-on-year in November, slower growth than October’s 4.7% and underperformance expectations in a Reuters survey of a 6.1% increase, but still marking a third month consecutive expansion.
Analysts say improving domestic demand and rising commodity prices helped boost the reading.
“We believe that China’s export growth could remain high for several more months due to the worsening COVID-19 situation abroad,” the note said.
However, they did see some signs that demand for these pandemic-related goods was losing momentum.
The firm shipments led to a November trade surplus of $ 75.42 billion, the largest since at least 1981 when Refinitiv records began. It was also broader than the survey’s forecast of a $ 53.5 billion surplus.
China’s exports were supported by strong foreign demand for personal protective equipment (PPE) and electronics for work from home, as well as seasonal Christmas demand, Nomura analysts said in a note.
The boom in sales of refrigerators, toasters and microwaves to households around the closed world has helped propel China’s manufacturing engine back to life, overwhelming demand for key metals like steel, copper and aluminum, after a sharp drop at the beginning of the year.
In another sign of buoyant trade, rising exports from China and a low rate of overseas container delivery have led to a recent domestic container shortage, state-run China Daily reported.
A series of early indicators showed that China’s economic recovery from the coronavirus pandemic has intensified, and manufacturing surveys show that new export orders expanded at a faster rate in November.
That comes despite a strong appreciation of the yuan in recent months, which some fear could affect exporters. Some companies reported that a strong yuan reduced profits and reduced export orders in November, the statistics office said this week.
The yuan has posted six consecutive months of gains, its longest winning streak since late 2014, and is trading at two-and-a-half-year highs.
Strong exports widened China’s trade surplus with the United States to $ 37.42 billion in November from $ 31.37 billion in October.
However, Chinese buyers increased purchases of US agricultural products, including soybeans, to meet China’s commitment in the initial trade agreement it signed with the United States in January this year.
While the Biden administration is expected to soften some of the rhetoric observed in strained trade relations between the United States and China in recent years, there are no immediate signs that the president-elect intends to undo the punitive tariffs introduced under the Trump administration.
Although imports from China were weaker than expected, volumes continued to increase sequentially, said Louis Kuijs of Oxford Economics.
“We expect imports of goods to grow even more in 2021, supported by strong domestic demand, and imports of capital goods to be better supported than those of raw materials,” Kuijs said.
China’s iron ore and copper imports fell in November from the previous month, customs data showed. Crude oil imports increased as customs continued to clear a delay. – Reuters
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