China’s Imports and Exports Rebound as Coronavirus Fades in World’s Second-Largest Economy

Date: Wednesday, July 15, 2020
Source: The Wall Street Journal

China’s trade surplus with the U.S. narrows from a year earlier on rise in agricultural imports

BEIJING—Chinese imports from the U.S. rose for the first time since the new coronavirus emerged earlier this year, showcasing Beijing’s post-pandemic purchasing power even as political tension between the world’s two largest economies continues to rise.

China’s appetite for meat and other agricultural goods helped Chinese imports of U.S. goods to jump by 11.3% in June from a year earlier, after a 13.5% drop in May, data from Beijing’s General Administration of Customs showed Tuesday. The Chinese buying helped to narrow Washington’s trade deficit with Beijing from a year earlier, though Chinese exports to the U.S. also improved, rising 1.4% in June from a year earlier after a 1.3% decline in May.

Increasing tensions between China and the U.S. on various fronts, including Hong Kong’s new security law, the origins of the coronavirus and Beijing’s territorial claims in the South China Sea, have ignited concerns among economists about deteriorating trade ties between the two countries.

The June trade figures, however, suggest that the economic relationship has so far been insulated from the geopolitical disputes, said Serena Zhou, a Hong Kong-based economist for Mizuho Securities.

Despite the tough talk, she said, “China is still a reliable market and one of the few places that actually has the virus under control.”

Even so, the momentum in China’s foreign trade could slow in the coming months amid uncertainties surrounding the coronavirus fight and its toll on the global economy, as well as the U.S.-China trade tensions, Li Kuiwen, a customs spokesman, said Tuesday.

For Chinese trade with the world at large, Beijing’s June trade figures showed increases in both total imports and exports compared with a year earlier, reflecting improving demand at home and abroad, as China and some of its trading partners brought the pandemic largely under control.

China’s imports from the rest of the world climbed 2.7% in June from a year earlier, Chinese customs officials said Tuesday, reversing a 16.7% slump in May and coming in much stronger than an expected drop of 10%, according to economists polled earlier by The Wall Street Journal.

Exports, meantime, edged up 0.5% in June from a year earlier, versus a 3.3% decline in May, customs data showed. June’s exports were also higher than economists’ median forecast for a 4.3% year-over-year decline.

Detailed data on traded commodities and countries of origin won’t be available until later this month, but Tuesday’s data showed China significantly ramped up its purchases of agricultural products from its global trading partners in the first half of the year.

In the first six months of 2020, China imported 2.12 million metric tons of pork, 1 million tons of beef and 45 million tons of soybeans from its trading partners, which represented increases of 140%, 42.9% and 17.9%, respectively, from the same period a year earlier.

Its overseas purchases of iron ore, crude oil, coal and natural gas also increased by volume in the first six months as commodity prices tumbled.

Also helping lift China’s exports were increased global demand for electronic products, as more people in the U.S. and Europe shifted to working from home during the pandemic, said Betty Wang, an economist with ANZ. The easing of lockdowns in some places also raised demand for Chinese goods, she added.

Thanks to the surge in China’s imports, Beijing’s overall trade surplus fell to $46.42 billion last month, much smaller than May’s $62.93 billion figure and economists’ expectations for a $59.30 billion surplus.

 

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