Strong Monthly Trade Figures Herald Full-Year Growth

CHINA’S IMPORTS IN September hit their highest levels since the trade war with the United States started in 2018. At $203 billion, imports were up 13.2% year-on-year last month, the General Administration of Customs announced.

Part of that was soya bean imports to help meet the targets of the US-China trade deal signed in January. Imports from the United States overall rose by 24.7% in the month year-on-year. Part of it was also semiconductor stockpiling ahead of Washington imposing further restrictions on the sale of US chips to Chinese companies. Taiwanese, South Korean and Japanese chipmakers were also beneficiaries.

However, part of it was demand for industrial commodities, helped by an appreciating yuan, but also confirming the recent improving industrial activity data and anecdotal reports of the recovery of domestic consumption gaining traction, as evidenced by rising car sales.

Exports, too, were brisk, up 9.9% in dollar terms (8.7% in yuan terms), with demand from abroad for consumer electronics joining that for personal protective equipment and other healthcare products.

As always, this Bystander cautions against reading too much into a single month’s figures. Another turn for the worse in US-China trade relations or the resurgence of Covid-19 in Europe remain potential pitfalls. The slight moderation in the pace of export growth in September from August is a reminder of that. Similarly, China’s share of world trade hitting a new high is because export production elsewhere remains depressed by the pandemic.

However, there does feel to be momentum to the recovery. Third-quarter GDP data due to be released on October 19 should point to China being on track to be the only G20 economy to grow this year.

1 Comment

Filed under Economy, Trade

One response to “Strong Monthly Trade Figures Herald Full-Year Growth

  1. Pingback: China’s Economy Rebounds But Risks Abound Ahead | China Bystander

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