Chinese exports surged in 2021 on solid global demand as countries reopened from pandemic lockdowns, data showed Friday, bumping its overall trade surplus to a new high and providing a much-needed boost to the stuttering economy, but officials warned of headwinds.
The world’s second-biggest economy saw a quick rebound from the coronavirus in the past two years — after cases first surfaced in a central city in late 2019 — allowing factories to operate and feed global appetite for electronics and medical supplies.
That led to a 29.9% spike in exports last year, helping push the annual trade surplus to $676 billion, with customs spokesman Li Kuiwen saying the surge was fanned by an uptick in shipments of mechanical and electronic products. Imports increased 30.1%.
But while China “handed in a dazzling report card” in the face of challenges, Li told reporters Friday that the economy “faces triple pressures of demand contraction, supply shock and weakening expectations”.
For December, exports rose largely in line with expectations — at 20.9% — though imports disappointed with 19.5% growth.
Julian Evans-Pritchard of Capital Economics said in a note that higher prices helped boost exports.
Another factor helping overseas shipments was “relaxing social distancing measures in the US and the west in general”, ING economist Iris Pang told AFP.
December’s export figures could also “reflect the Omicron damage to the global supply chain”, with export orders shifting to China from other countries, said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
“Currently, the strong exports may be the only driver helping China’s economy,” he added.
China’s manufacturing sector has been hit by spot shutdowns around the country as Beijing pursues a strict zero-Covid strategy of lockdowns, mass testing and border closures to fight the spread of Omicron.
The latest outbreaks and government measures threaten to deal a further blow to the economy after being battered in the past six months. Gross domestic product growth for 2021 is expected to come in at 8% when data is released Monday, though analysts warned of a tough year ahead as a slowdown in the property sector weighs.
Covid clusters have sprung up in several key port cities including the southern hub of Shenzhen, Tianjin near Beijing and the northern hub of Dalian.
With new export orders remaining weak and foreign demand growth slowing from its peak last year, Louis Kuijs of Oxford Economics said export momentum is expected to ease in 2022.
“There is limited scope for a rise in exports volumes this year given that ports are already stretched to capacity,” Evans-Pritchard said.
Foreign demand is likely to drop as pandemic-related factors ease and backlogs are cleared.
And “constraints on developer financing mean that slowing property construction is likely to continue to weigh on China’s commodity imports for some time,” he added.