China's trade surplus sets a record in 2021

China posted a surplus of nearly $680 billion, helping to support an economy that is being dragged down by real estate and new outbreaks.

Data released by China's Customs Administration today showed that the country's exports in December reached $340.5 billion, bringing the total year-to-date turnover to $3.360 billion. Imports in December were 246 billion USD, the whole year was 2,690 billion USD. China's trade surplus last month was therefore $94.5 billion and last year was $676 billion – a new high.

The figures show the picture for the whole year – demand for Chinese goods has surged as Chinese factories have shipped everything from electronics to furniture. However, commercial growth is expected to weaken this year, as demand for tech gadgets for telecommuting and medical equipment slows. Consumption will also shift to services more, as the world begins to live with Covid-19.

"Last year's 30% growth is clearly difficult to sustain. Therefore, this year's export growth will drop sharply," in part because global growth is likely to slow as well, said Ding Shuang, the region's chief economist. China and North Asia at Standard Chartered. Restriction and blockade policies in China could also cause delays. However, "the key still lies in how external demand grows".

The Omicron outbreak in China is disrupting many supply chains. Production and transportation of goods in this country are affected by strict anti-epidemic policies. Although so far, the damage to industrial and commercial production has not spread, some factories in Xi'an have had to close or reduce capacity. Productivity at ports in Ningbo, Shenzhen, Tianjin and Shanghai has all been affected.

Li Kuiwen, a spokesman for China's Customs Administration, said that this year there will be many factors of uncertainty, instability and imbalance. For example, this year's benchmark will be higher, putting pressure on the numbers. However, the positive fundamentals for trade will not change, he said.

Global dependence on manufacturing in China could ease if regions like Southeast Asia recover from the pandemic. This will help companies move less orders back here, after moving to China.

Ha Thu (according to Bloomberg)

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