China’s full-year numbers show how global trade was almost crippled by the Covid-19 pandemic during the first quarter of 2020, but recovered in large part thanks to Chinese exports, according to an analysis by Trade Data Monitor, the world’s top source of trade statistics.
In the first quarter of 2020, as China’s economy contracted 6.8%, exports fell 13.4% year-on-year to $477.9 billion. By comparison, U.S. exports declined only 3% in the first quarter, to $395.7 billion.
By the end of the year, however, China’s exports had risen 3.6% to a record $2.6 trillion while U.S. exports declined 13.9% to $1.3 trillion in the first 11 months of the year. For the year, China clocked a trade surplus of $535 billion, its highest figure since 2016.
China successfully contained the Covid-19 virus effectively and got its factories and ports running again. Thanks in large part to this strong performance, global trade is now expected to decline around 10%, compared to the 20% decline that was expected in the spring.
In 2020, “China was the only one major economy in the world that has reached a positive growth in goods trade, the status of [China as] the largest goods trading nation [in the world] has been further consolidated,” said China customs spokesman Li Kuiwen, according to the South China Morning Post. For the year, China’s economy is now expected to grow around 2%, making it the only rich economy to record positive economic growth in 2020.
In December, for the seventh straight month, China registered strong trade growth. Exports increased 18.1% year-on-year to $281.9 billion. China’s trade surplus with the rest of the world increased to $78.2 billion in December, its highest ever, beating its previous record of $75.4 billion in November.
In 2020, China’s biggest market was again the U.S. Exports rose 7.9% to $451.8 billion while imports increased 9.8% to $134.9 billion, increasing the trade surplus with the U.S. to $316.9 billion. Shipments to the European Union increased 6.7% to $391 billion, while imports rose 2.3% to $258.6 billion. Exports to Latin America, India and Japan, however, all declined.
As China faced tariff barriers in the U.S. and higher wage costs, supply chains have moved elsewhere in Asia. Exports to Vietnam rose 16.3% to $113.8 billion.
Thanks to its prowess in manufacturing and Western consumers’ shifting of work to home from office, China ramped up exports of computers, phone, routers and data storage units. Exports of high-tech goods increased 6.3% to $776.7 billion. However, exports of products people use to move around all declined dramatically. Exports of bags and containers fell 24.2% to $20.6 billion, garments dropped 6.4% to $137.4 billion, and footwear shipments fell 21.2% to $35.4 billion.
In the U.S. and Europe, hospitals, pharmaceutical companies and public health officials are buying medical equipment they need, such as ventilators, face masks, and now many key ingredients for mass-produced vaccines, from China. Exports of medical devices increased 40.5% to $18.1 billion.
China’s importance as an import market continued to grow. It ramped up imports of meat 59.6% to $30.7 billion, partly because of swine flu and other domestic supply problems. It increased imports of cosmetics 29.4% to $20.2 billion, a reflection of its booming middle class. Imports of petroleum, coal and natural gas all fell by double-digits as commodity prices declined, industrial activity slowed, and people drove less because of the pandemic.
It’s unclear how long China can sustain this robust growth in exports. As countries roll out vaccines, they are bound to slow import of medical supplies. Markets for laptops and other electronics will saturate. But as the world seeks to recover from the devastation of the Covid-19 pandemic, trade data suggests it’s more dependent than ever on the Chinese export engine