China posted a record monthly trade surplus in October as exports increased despite disruptions in the global supply chain.
Exports rose 27.1% in dollar terms last month from the previous year to $ 300.2 billion, data from the General Customs Administration showed on Sunday. This was the 13th consecutive month of double-digit growth and surpassed economists’ expectations of a 22.8% gain. Imports increased by 20.6%, leaving a trade surplus of $ 84.54 billion.
China’s trade growth remained well above pre-pandemic levels all year. Its exports until October have already passed the whole of 2020.
Strong trade performance is lending support to a Chinese economy that has slowed sharply in recent months due to weak domestic demand caused by a housing crisis, electricity shortages that slowed industrial production, and worsened weak consumer spending. from sporadic coronavirus outbreaks.
China’s coal imports nearly doubled in October compared to the previous year, as Beijing rushed to cope with power cuts caused by shortages of raw materials and increased demand for electricity, particularly from oriented producers. export.
Imports of natural gas, an alternative to electricity for heating homes, increased by 22% in the first 10 months of the year.
Global trade hit record highs this year as economies around the world recovered from virus-induced lockdowns in 2020. This has strained supply chains in many countries due to container and ship shortages. as well as capacity in ports, including drivers. who deliver goods to retailers.
The outlook for the supply chain crisis could improve, as predicted by the drop in shipping costs.
China’s exports to the European Union and the United States have grown fastest among its major trading partners this year, customs data showed.
The nation’s trade surplus with the United States, a source of trade tensions between the world’s two largest economies, rose to 2.08 trillion yuan ($ 325 billion) in the 10 months to October from 1.75 trillion yuan. the year before, partly because Chinese imports of US soybeans have slowed due to weather-related problems in recent months.
Electrical machinery and products accounted for nearly 60 percent of China’s exports by value this year, the customs administration said.
Labor-intensive products such as clothing and plastic products made up another 18%. Goods such as home appliances, lighting and furniture saw the fastest export growth in October, analysts from Goldman Sachs Group Inc. said in a statement.
China is the world’s largest source of demand for most commodities due to its industry and heavily construction economy.
Demand for construction goods slowed this year due to the country’s housing market downturn, with iron ore imports declining in volume in October.
Dollar inflows have supported the Chinese currency this year and added to the government’s foreign exchange reserves, which climbed to $ 3.22 trillion at the end of October, according to the People’s Bank of China.
Dollars offer China an important cushion against any future shocks in the world economy, even as individual companies like China Evergrande Group struggle to repay their debts.
According to an analysis by Bloomberg Economics, the nation’s strong export momentum will last at least for the next few months. Demand for Chinese products could slow if consumers in developed economies continue to shift away from consumer goods to services and countries in South and Southeast Asia resume factory production after closures due to the pandemic.
The government in recent days has warned of “downward pressure” on the economy and promised measures to boost domestic demand, including more supportive policies for small and medium-sized enterprises.
It was not promised to use the housing market to provide temporary stimulus and the central bank remained cautious, continuing to lend short-term to keep interbank liquidity stable. Bank reserve requirements have remained unchanged since July and official interest rates have remained stable since last year.