China Trade Balance December 2020


China: Merchandise exports surge in December

January 14, 2021

Merchandise exports were up 18.1% annually in December (November: +21.1% year-on-year), markedly above market expectations. Surging exports in recent months have been driven by shipments of protective equipment and work-from-home electronics, which have both been in strong demand due to the pandemic. Meanwhile, imports were up 6.5% year-on-year (November: +4.5% yoy), indicative of solid domestic demand.

As a result, the merchandise trade balance rose from the previous month, recording a USD 78.2 billion surplus in December (November 2020: USD 75.4 billion surplus; December 2019: USD 47.3 billion surplus). Lastly, the trend improved, with the 12-month trailing merchandise trade balance recording a USD 538 billion surplus in December, compared to the USD 507 billion surplus in November.

Looking ahead, export growth is set to stay elevated in Q1, supported by a highly favorable base effect (given China was in the grips of the coronavirus outbreak in Q1 2020) and continuing high demand for pandemic-related goods. However, export growth should then moderate markedly later in the year. On the outlook for exports, analysts at Standard Chartered commented: “We are concerned that the recent strong export growth trend is not sustainable, as it is dominated by pandemic-related products. […] Furthermore, signs of both China’s share of global exports and global demand for electronics plateauing add to our concerns about the sustainability of China’s strong export growth. We believe these factors also explain why China’s policy makers have become increasingly wary of rapid Chinese yuan (CNY) appreciation recently.”

Our panelists forecast that exports will expand 5.5% in 2021 and imports will rise 7.6%, bringing the trade surplus to USD 489 billion. In 2022, FocusEconomics panelists expect exports will expand 7.0%, while imports will rise 6.4%, leaving the trade surplus at USD 534 billion.


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China Trade Balance Chart

China Trade12m December 20 20

Note: 12-month sum of trade balance in USD billion and annual variation of the 12-month sum of exports and imports in %.
Source: General Administration of Customs of the People’s Republic of China and FocusEconomics calculations.

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