China reports better than expected foreign trade in H1 despite pandemic

Thanks to nationwide efforts to ensure foreign trade, China has reported better than expected foreign trade in the first half of the year, with imports and exports of goods at 14.24 trillion yuan ($2.04 trillion), down 3.2 percent year-on-year and narrowing the decline 1.7 percentage points compared to the first five months.

During the period, the country’s exports dropped 3 percent to 7.71 trillion yuan and imports fell 3.3 percent to 6.53 trillion yuan, data from the General Administration of Customs (GAC) showed on Tuesday.

However, both imports and exports registered positive growth in June, reflecting signs of faster recovery and stability as some countries loosened lockdowns and domestic demand increased with coronavirus outbreak under control at home.

In June, the country’s foreign trade increased 5.1 percent year-on-year, with exports growing 4.3 percent and imports up 6.2 percent.

The rise in China’s trade is sending a strong positive signal for China’s recovery and a rebound in international orders, Liu Xuezhi, a macroeconomics expert at the Bank of Communications told the Global Times on Tuesday.

“There has been a significant acceleration in China’s production activities, and the June figures show that demand in the international market is also recovering and more orders were made and fulfilled last month.”

In the first half, ASEAN became China’s biggest trading partner, with foreign trade increasing 5.6 percent to 2.09 trillion yuan.

By contrast, China’s foreign trade with the EU was down 1.8 percent to 1.99 trillion yuan, and down 6.6 percent with the US to 1.64 trillion yuan.

The robust growth in trade between China and ASEAN is the result of the effective containment of the coronavirus in the regions and the free trade contracts signed over the years, Liu said. “Supply chains with ASEAN are likely to be the first to fully recover, with the free trade deal and less disruption to stimulate more demand after the coronavirus outbreak.”

It’s worth mentioning that China’s exports of urgently needed supplies grew rapidly in the first six months as the country ramped up efforts to help combat the global pandemic. During the period, the country’s exports of textile products including face masks surged 32.4 percent, according to the GAC. Exports of medicines grew 23.6 percent and pharmaceutical exports soared 46.4 percent.

Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times that inelastic demand for China’s products is bound to lift the trade volume in the second half of this year.

Over the second half of the year, trade may start to normalize even as the global pandemic persists, Bai said. “As overseas demand picks up and supply chains recover somewhat, trade will also start to recover between China and some of its biggest trade partners, including Europe and the US,” he said.

Source: Global Times