China’s exports in December up 10.7% as U.S. tariffs loom : NPR

HONG KONG – China’s exports in December grew faster than expected, as factories rushed to fill orders to overcome higher tariffs that US President-elect Donald Trump has threatened to impose once he takes office.

Exports increased by 10.7% over the previous year. Economists had expected the economy to grow by about 7%. Imports rose by 1% year on year. Analysts had expected it to shrink by about 1.5%. As exports exceeded imports, China’s trade surplus rose to $104.84 billion.

Below are some highlights from the report.

Higher tariffs on the horizon

Trump has pledged to lift tariffs on Chinese goods and close some of the loopholes that exporters are now using to sell their products at cheaper prices in the United States. If passed, his plans would likely raise prices in America and put pressure on sales and profit margins for Chinese exporters.

China’s exports are likely to remain strong in the near term, as companies try to “counter” potential higher tariffs, said Zichun Huang of Capital Economics.

“Overseas shipments are likely to remain resilient in the near term, supported by further gains in global market share thanks to a weaker real effective exchange rate,” she wrote in a note.

But Huang said exports would likely weaken later in the year if Trump follows through on his threat of tariffs.

Register of exports and aggregate trade

Officials who briefed reporters in Beijing said the total value of China’s imports and exports reached a record high of 43.85 trillion yuan (about $6 trillion), up 5% from the previous year. Wang Lingjun, deputy director-general of the Customs Administration, said China is the world’s largest exporter and a major trading partner for more than 150 countries and regions.

While growth in the rest of China’s economy has slowed in the wake of the pandemic, partly due to a downturn in the housing industry, exports have risen. Under leader Xi Jinping, the ruling Communist Party is encouraging factory modernization and a shift to more high-tech manufacturing. China’s exports of mechanical and electrical products increased nearly 9% last year compared with the previous year, with growth in exports of “sophisticated equipment” jumping more than 40%, the report said Monday.

Electric vehicle exports rose 13%, 3D printer exports jumped nearly 33%, and industrial robot shipments rose 45%. E-commerce trade, including sales from companies including Teemo, Shen and Alibaba, recorded 2.6 trillion yuan ($350 billion), more than double the level in 2020.

What about imports?

The officials said that China is not seeking a trade surplus and wants to increase its imports. But while imports rose last year, they still lag behind exports, partly due to lower commodity prices such as oil and iron ore.

“Regarding this year’s imports, we believe there is still a lot of room for growth. This is not only because my country’s market capacity is large, but there are many levels, and it has huge potential,” said Love Daliang, an official with the Customs Administration. Spokesman.

China is also prohibited from importing some products due to trade restrictions, Leaf said, referring to controls imposed by the United States and some other countries on strategically sensitive exports to China, such as sales of advanced semiconductors and materials that could be used for military purposes.

“In addition, some countries are politicizing economic and trade issues, abusing export control measures, and unreasonably restricting the export of some products to China. Otherwise, we will import more,” he added.

Where do all these exports go?

The officials stressed China’s efforts to expand trade with countries participating in the Belt and Road Initiative to expand infrastructure construction and trade in most parts of the world. Trade with these countries accounted for about half of China’s total trade last year.

They pointed out that China has completely eliminated customs tariffs on imports from the poorest countries in the world.

But China also values ​​trade with traditional markets such as Europe and the United States, and two-way trade with the United States recorded growth of about 5% last year.

“We have imported agricultural products, energy products, medicines and aircraft from the United States, and exported clothing, consumer electronics and home appliances to the United States, achieving mutual benefit and win-win results,” Wang said.

China and the issue of excess capacity

US officials and other critics say Beijing has pushed to expand exports to help offset slowing demand within China as the economy slows. With factories in some industries operating below capacity, they assert that the country suffers from an “excess capacity” problem.

Chinese officials reject this claim.

“Whether from the perspective of comparative advantage or global market demand, there is no such thing as China’s excess capacity problem. This problem is just a completely false suggestion,” Wang said when asked about the issue.

He added that China has made its industries more efficient through modernization, investment and innovation supported by research and development. “We have ensured the stability of global production and supply chain through our entire manufacturing chain, and driven technological progress and industrial modernization around the world.”