USD/CNY crashes to 2018 lows as China trade surplus hits record high
- by Claude Bryan
- in Markets
- — Dec 8, 2020
"Imports are slightly weaker than expected, which shows that the infrastructure spending might need to take a break as the winter is approaching" As the year-end approaches, China needs to ramp up its imports from the U.S.to meet the terms of the phase-one trade deal, but the latest data showed that China is nowhere near meeting the target.
China's exports are beating expectations as the world's biggest manufacturing nation's overseas markets reopened from Covid-19.
Imports in the first 11 months reached 8.95 million tonnes, the data also showed, a 63% rise on the same period a year ago.
Similarly, the gross domestic product (GDP) has recovered in the subsequent months after a historic drop of 6.8 percent in the first quarter of the year, when parts of China were under lockdown due to the virus.
Iris Pang, chief economist for Greater China at ING, said the latest figures were likely the result of "urgent export deliveries before Thanksgiving and Christmas", with importers anxious about lockdowns ahead of the year-end holidays.
China's solid trade figures and the recovery in domestic consumption points to an economic rebound that remained on track in NovemberGlobal demand had started recovering before the latest resurgence in virus cases in some of China's biggest markets, including the USA and Europe.
Washington state reports 1,503 new COVID-19 cases on Saturday
Restaurants will continue to be prohibited from serving customers after 9 p.m. and can do only takeout and delivery. Mask-wearing is required in all businesses and whenever leaving home.
HSBC economist Erin Xin said enforcement of the Phase One deal signed with the USA had likely helped to keep imports "buoyant", with shipments of key products such as soybeans continuing to grow.
"Demand for pandemic-related and electronics goods was pretty much unaffected by the newly imposed social-distancing measures, which affect services more than goods trade", said Michelle Lam, Greater China economist at Societe Generale SA in Hong Kong.
As a result, the trade surplus increased to more than $75 billion.
China's trade surplus with Europe widened by 20% to $11.3 billion.
The trade pattern structure has also been continuously optimized, with the proportion of general trade in the country's overall foreign trade growing larger. -China trade relations in recent years, there are no immediate signs the President-elect intends to unwind the punitive tariffs introduced under the Trump administration. All of which indicates better times ahead for the Chinese trade surplus. State-owned enterprises' imports and exports topped 4.22 trillion yuan to account for 14.5 percent of the total.
"We caution that the export strength could temper in 2021 as the recovery in major economies moderates after the V-shaped rebound and production in other countries gradually normalize", Lam said.
