Trading With The Enemy

NOVEMBER’S EXPORT GROWTH, at 21.1% year-on-year, was its strongest in almost three years.

As ever, one month’s numbers should not be taken in isolation; China’s exporters are benefiting from the continued interruptions to industrial output in Europe and the United States. However, there is a certain curiosity in the fact that trade in the month was most robust with two countries with which China’s bilateral relations are strained, the United States and Australia.

Exports to the United States were up by nearly 50% year-on-year in the month, with Covid-19 driven purchases of medical and electronic equipment notably healthy, and proving again that the two sectors are decoupling-resistant. In the opposite direction, imports were up by about one-third year-on-year for the second month, driven by agricultural produce, mostly feed for hogs as China’s devastated herds recover from African swine fever faster than expected.

However, China’s surplus with the United States hit its highest level during US President Donald Trump’s time in office, despite him having made eliminating it such a high-profile objective at the start of his term.

Exports to Australia rose by 20.6% year-on-year, and imports from there rose by 8.3% year-on-year, although both were down on October’s level. December’s numbers should look much worse as tariffs of up to 212% on Australian wine, and other punitive anti-Australian trade measures against barley, beef, coal, copper, cotton, lobsters, sugar, timber, wheat and wool were introduced late in November.

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Filed under China-Australia, China-U.S., Trade

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