China’s exports increased sharply in March. Imports growth rose to the highest in four years in yet another increase to its economic rebound. Significantly, it is signaling improving global demand amid progress in worldwide coronavirus vaccination.
Last month Chinese exports gained 30.6% from a year ago in U.S. dollar terms. An impressive figure, however, still lagging the 35.5% increase that analysts polled by Reuters had anticipated. Moreover, the country’s imports in U.S. dollar terms increased 38.1% in March from a year ago, surpassing the 23.3% rise those analysts had expected.
Additionally, the stronger-than-anticipated increase in imports led China’s trade surplus to decline to $13.8 billion in March. This is much smaller than the Reuters poll’s estimate of $52.05 billion.
According to Asia-Pacific chief investment officer at Fidelity International Paras Anand, the latest data suggest that China’s economic recovery is entering a different phase.
He added that over the last few months, the country’s recovery from the coronavirus pandemic had concentrated on output, as seen in strong export numbers. However, he says demand seems to be picking up.
China was the only major economy to record growth in 2020
As we all remember, China was the first country to report cases of the COVID-19 in late 2019. Official data revealed the economy was hitting its trough in the first quarter of 2020 when the number of infections peaked.
The country seemed to have largely contained the outbreak and became the only major economy to record growth last year when it increased by 2.3%. China has set a growth target of over 6% for 2021. Meanwhile, the International Monetary Fund anticipates the Asian giant to grow by 8.4% in 2021.
However, the massive initial hit from the coronavirus crisis meant China’s growth in 2020 was still its weakest in 44 years.
The data revealed total Chinese imports surged 38.1%, beating the 23.3% forecast year-on-year last month. This is its’ fastest pace since February 2017 on high commodity prices compared to the 17.3% growth in February.
Meat imports of 1.02 million tonnes in March recorded the highest monthly volume since at least January 2020. Meanwhile, imports for soybeans, iron ore, copper, and crude oil also increased.
The U.S. is not seeking confrontation with China
In 2021, China has set a modest growth target of at least 6%. Authorities are plotting a careful course out of a year disrupted by COVID-19 and amid intensified tensions with the United States.
U.S. President Joe Biden announced in March that the country was not seeking confrontation with China over differences on trade.
China’s trade surplus with America declined to $21.37 billion in March from $23.01 billion in February.
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