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China is cementing its status as the world’s dominant trading nation, confounding warnings that a once in a century pandemic combined with simmering tensions with the U.S. would derail that status.
Surging global demand for everything from hazmat suits to work-from-home technology has allowed China, which contained the virus months ago, to capture record market share of global exports by quickly reopening its factories while the rest of the world grappled with lockdowns. It’s a striking reversal from the first two months of the year when China’s exports contracted by 17.1%.
It’s also an outcome that underscores the nation’s enduring role in manufacturing even amid simmering tensions with the U.S. that have fueled talk of shifting supply chains. For all the tariffs levied by the Trump administration, monthly sales to the U.S. remain robust.
China’s exports of personal protective equipment, WFH devices jumped
“China’s export performance during this crisis is indeed a proof of its solid status as the world’s factory,” said Yao Wei, China economist at Societe Generale SA. “It is reliable, as the quick and effective containment of the outbreak in China allowed its manufacturing sector to resume operations way ahead of others.”
The bumper performance was reflected in government data for September which showed exports rose for the fourth straight month while imports surged. Li Kuiwen, a spokesperson for the General Administration of Customs, told reporters that China’s overall share of world trade hit a record in the seven months to July, citing demand that included health-care equipment and technology.
China’s export share in global trade gained amid pandemic
For now, the picture is upbeat. Exports grew 9.9% in dollar terms in September from a year earlier, while imports rose 13.2%, the customs administration said Tuesday. That left a trade surplus of $37 billion for the month. Economists had forecast that exports would increase by 10% while imports would edge up 0.4%.
“Renewed virus outbreaks in trading partners will be a challenge, but shipments of products benefiting from virus-related demand should continue to hold up,” said Louis Kuijs, an economist at Oxford Economics.
The China figures gel with an improving global outlook, for now. The World Trade Organization expects global merchandise trade to fall by 9.2% this year from 2019, compared with the 12.9% drop projected in April. All 10 gauges on the Bloomberg Trade Tracker fit in their “normal” ranges, starting in early September.