Countries around the world are struggling to deal with problems created by the coronavirus crisis. This makes sense, as millions of people lost their jobs. Moreover, it is still too early to analyze all the issues connected with the pandemic and how they affected the global economy. However, people should pay attention to the economy of China. Coronavirus originated in the Chinese city of Wuhan. Nevertheless, the country’s government was able to minimize the damage caused by the pandemic.
According to the country’s General Administration of Customs, in July China’s dollar-denominated exports rose 7.2% while imports declined 1.4% compared to the same period of time last year. Interestingly, economists expected a different outcome. They expected the dollar-denominated exports to fall by 0.2% compared to a year ago, while imports were predicted to have risen 1% from a year ago.
For example, in June the country’s dollar-denominated exports rose 0.5% compared to the same period of time in 2019. Moreover, in June imports advanced by 2.7%.
The economy of China and various factors
As can be seen from the information provided by the country’s General Administration of Customs, the demand for products produced in China remains high despite all challenges.
Moreover, last month, China posted a trade surplus of $62.33 billion. It is worth mentioning that a trade surplus for July surpassed expectations. Interestingly, last month’s trade surplus surpassed the trade surplus from June by more than $16 billion.
Importantly, the coronavirus pandemic had a negative impact on global demand. However, exports from the world’s second-largest economy held up thanks to the demand for medical supplies.
Interestingly, exports in medical supplies jumped in the first six months of the year. This is not the end of the story however, as the trend persisted in July as well. The country exported a huge amount of face masks, medical products in 2020. Moroever, as governments in many countries closed non-essential businesses for several months, the demand for work-from-home equipment increased and Chinese companies earned more money thanks to such measures.
Furthermore, China’s stimulus-led recovery looks set to continue in the coming months, and as a result, imports will also increase over time. Moroever, foreign demand is also likely to continue to recover but there are problems as well. For example, the demand for products related to the pandemic most likely is temporary. Also, trade tensions between the U.S. and China is another risk factor.
The country’s government is paying more attention on the domestic market. This shows that the Chinese government understands the risk factors, and wants to boost the domestic market.
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