Growth in China’s exports jumped to its highest level in more than a year and a half in October, in the latest sign that the country’s rapid economic recovery from coronavirus is strengthening its role in global trade.
Exports from the world’s second-biggest economy beat analysts’ expectations to rise 11.4 per cent year-on-year during the month, official data showed on Saturday, the strongest growth rate since March 2019. That compares to a 9.9 per cent increase in September, previously the year’s high.
China’s export machine has flourished during the Covid-19 crisis, with growth over recent months supported by international appetite for its medical equipment and electronics products.
Trade activity has contributed to China’s recovery from the pandemic, at a time when other economies are still grappling with its impact. China’s gross domestic product added 4.9 per cent year-on-year in the third quarter.
China’s trade balance during October
Despite robust overseas demand for its goods, China remains vulnerable to economic conditions in its most important markets, said Iris Pang, chief economist for Greater China at ING, who suggested October’s export data could be the best this year.
“Covid in Europe and the US has come back, and there are some lockdowns again, which should affect demand for goods and therefore China’s exports,” she said.
Data showed that China’s imports rose 4.7 per cent in October, increasing for a second straight month, albeit below expectations of a 9.5 per cent increase according to a Reuters poll.
The rate of growth was much lower than a 13.2 per cent jump in September, when imports into the country soared to their highest dollar amount on record. The increase was driven in part by one-off purchases of technology parts ahead of US sanctions on telecoms group Huawei, as well as demand for commodities.
China imported almost 1bn tonnes of iron ore in the first ten months of 2020, up 11.2 per cent year-on-year. In October, its imports of the commodity rose 14.9 per cent against the same month last year, but dipped slightly compared to September’s level.
China’s recovery has been fuelled by strong industrial growth, with its share of steel production reaching record levels earlier this year and construction booming. Consumer spending has been less impressive, but retail goods data returned to growth in September this year.
“The consumption sector could be a source of job creation that gradually replaces the job pool in the manufacturing sector,” Ms Pang said.
Higher exports meant China’s trade balance was $58.4bn in October, compared to $37bn a month earlier.