Jan 14, 2021 08:28 PM

Update: China Trade Surplus Hits Record as Exports Surge More Than Expected

A container ship sits off the port of Lianyungang in East China’s Jiangsu province on Jan. 7.
A container ship sits off the port of Lianyungang in East China’s Jiangsu province on Jan. 7.

China’s goods trade surplus hit a record high last month while exports rose more than expected, official data showed Thursday, as overseas demand for personal protective and remote work equipment remained strong while the Covid-19 pandemic continued to rage across much of the world.

Exports rose 18.1% year-on-year in dollar terms in December, down from 21.1% in the previous month, according to data (link in Chinese) from the General Administration of Customs. The reading marked the seventh consecutive month of growth and beat the median forecast of 14% growth in a Caixin survey (link in Chinese) of economists.

Imports increased 6.5% year-on-year in December, faster than the previous month’s 4.5%. The reading was higher than the Caixin survey’s median forecast for 5.1% growth.

China’s imports have been buoyed by the domestic recovery, which continued to stay on track at year-end, according to Erin Xin, an economist at HSBC Bank PLC.

trade 1

China’s trade surplus hit $78.2 billion last month, exceeding November’s surplus of $75.4 billion, according to customs data compiled by economic data provider CEIC. December’s surplus was the highest on record in data going back to 1992.

For the full year of 2020, China’s goods exports grew 3.6%, while imports fell 1.1%. The annual trade surplus reached $535 billion, the second highest on record since 1950, according to CEIC.

“China became the only major economy in the world that achieved positive growth in goods trade (in 2020), and its status as the largest goods trading country across the globe has been further consolidated,” Li Kuiwen, a spokesperson of the customs administration, said at a news conference (link in Chinese) on Thursday.

“The potential recovery of the world economy is expected to lead to growth of trade activities, and the steady growth of the domestic economy has also provided strong support for the development of trade,” said Li. “But at the same time, we should also see that there are many uncertainties in the epidemic situation and the external environment. China’s trade development is still facing difficulties and challenges.”

Exports were a bright spot for China’s economic performance last year due to its faster return to production and strong global demand for pandemic-related products and electronics, HSBC economist Xin said.

Last year, China’s trade surplus with the U.S. reached $317 billion (link in Chinese), up 7% from 2019 (link in Chinese). In December, China’s goods imports from the country grew at a faster pace than the previous month, indicating Beijing’s continued efforts to fulfil its phase one trade agreement with Washington, economists with Nomura International (Hong Kong) Ltd. said.

trade 2

For this year, Xin expects China’s exports to grow 7.9%. She said although the ongoing rollout of vaccines and recent yuan appreciation are likely to curb export growth, China’s exports should stay robust as the recovery in global demand will likely outweigh these impacts.

In addition, China has recently reached trade agreements including the Regional Comprehensive Economic Partnership, or RCEP, and the EU-China investment deal, which will also help boost trade flows, Xin said. “(S)trong exports growth will help to support the manufacturing sector and thus, manufacturing investment, which we expect to be the key driver for investment growth this year.”

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The Nomura economists said the strong export growth in December supported their forecast that China’s GDP grew 5.7% year-on-year in the fourth quarter in 2020. The official data for the fourth-quarter and annual GDP growth are scheduled to be released on Monday.

The economists said China’s exceptionally high export growth since the second quarter last year reduced the economy’s need for larger stimulus measures in 2020, which has thus lessened the burden of deleveraging and alleviated the usual pain from exiting loose fiscal and monetary policies. “We expect Beijing to normalize its policy stance in 2021, although this normalization should be moderate and gradual.”

Contact reporter Tang Ziyi ( and editor Michael Bellart (

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