China’s trade surplus with the US widened last year, underlining the failure of US President Donald Trump to narrow the gap during his tenure, as demand soared for electronics and medical equipment during the COVID-19 pandemic.
The increase came on the back of a jump in exports through most of last year as Chinese factories kicked back into gear from the second quarter following a strict lockdown that managed to broadly contain COVID-19 and allow economic activity to return.
Trump had made addressing the US’ large trade gap with China a priority when he took office four years ago and signed a partial agreement with Beijing to boost the country’s purchases of US goods such as soybeans.
However, Chinese customs data showed that the surplus with the US climbed 7.1 percent to US$316.9 billion last year.
The figure is a 14.9 percent jump from 2017’s surplus of US$275.8 billion — which was already a sensitive political issue due to Trump’s claims that China promoted unfair practices and killed US jobs.
The world’s second-largest economy in the first quarter of last year experienced a record contraction as COVID-19 essentially brought all activity to a halt, but it soon recovered as lockdowns around the country were eased and people went back to work.
Total exports rose 3.6 percent, although imports shrank 1.1 percent.
However, last month alone, exports and imports rose more than expected, 18.1 percent and 6.5 percent respectively.
“With the pandemic under control in China, factories and export-oriented companies have resumed normal operations earlier than most other countries, allowing China to meet global demand better,” AxiCorp Financial Services Pty chief global markets strategist Stephen Innes said.
China last month posted a trade surplus of US$78 billion, which analysts said was “at or near record levels.”
Chinese Customs Administration spokesman Li Kuiwen (李奎文) yesterday told reporters that “facing unprecedented difficulties and challenges, our country’s imports and exports delivered a brilliant report card,” adding that the outcome was “significantly better than expected.”
Li said that outbound shipments of electronics rose, with increases seen in notebook computers and household appliances, as well as medical instruments and equipment.
ING Bank NV chief economist for Greater China Iris Pang (彭藹嬈) said that Chinese exports likely did well as “other exporters for most of the year had been in difficult positions because of COVID-19,” shifting more orders to China.
Concerning the US-China surplus, she said that restrictions due to the COVID-19 outbreak in the US would also have hit its export capacity.
Nomura Holdings Inc chief China economist Lu Ting (陸挺) said that Chinese imports from the US last month jumped 45 percent year-on-year, “pointing to Beijing’s continued effort to fulfill its commitments on the phase 1 trade deal.”
US-China relations have deteriorated to their worst in decades under the Trump administration, largely because of the trade dispute that saw Washington hit Chinese imports with huge tariffs — drawing retaliation and tit-for-tat moves.
Overall, Lu said that he expects export growth to “remain elevated” for the first half of this year, partly because of another wave of COVID-19 infections bolstering demand for protective equipment and work-from-home products around the world.
In an interview with the Wall Street Journal this week, US Trade Representative Robert Lighthizer defended the Trump administration’s tactics of imposing tariffs on hundreds of billions of dollars of Chinese goods, saying that Trump had “changed the way people think about China.”
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