Chinese export growth reached its highest level in more than a year and a half in October. This is the latest sign that the country’s rapid economic recovery from coronavirus is strengthening its role in world trade.
Exports from the world’s second largest economy exceeded analysts’ expectations of an 11.4 percent year-on-year increase over the month. Official data on Saturday showed the strongest growth rate since March 2019. This corresponds to an increase of 9.9 percent in September, the previous year’s high.
China’s export machine flourished during the Covid-19 crisis. The growth in recent months has been aided by the international appetite for medical devices and electronic products.
The country’s trading activity has helped China recover from the pandemic at a time when other economies are still grappling with its effects. China’s gross domestic product increased by 4.9 percent in the third quarter compared to the previous year.
$ 58.4 billion
China’s trade balance in October
Despite robust overseas demand for its goods, China remains vulnerable to economic conditions in its key markets, said Iris Pang, chief economist for Greater China at ING, suggesting October export data could be the best this year.
“Covid has returned in Europe and the US, and there are some lockdowns again that should impact demand for goods and therefore China’s exports,” she said.
Data showed that China’s imports rose 4.7 percent in October and rose for a second straight month, despite falling below expectations of a 9.5 percent increase, according to a Reuters poll.
The rate of growth was much slower than a 13.2 percent jump in September when imports into the country rose to the highest dollar ever recorded. The increase was partly due to the one-time purchase of technology parts prior to the US sanctions against telecommunications company Huawei, as well as the demand for raw materials.
China imported nearly 1 billion tons of iron ore in the first ten months of 2020, up 11.2 percent over the previous year. In October raw material imports rose by 14.9 percent compared to the same month last year, but fell slightly compared to September.
China’s recovery was driven by strong industrial growth. The share of steel production reached a record level early this year and construction was booming. Consumer spending was less impressive, but retail goods data grew again this September.
“The consumer sector could be a source of job creation that is gradually replacing the manufacturing job pool,” said Ms. Pang.
Higher exports meant China’s trade balance was $ 58.4 billion in October, compared to $ 37 billion in the previous month.