China Triples Coal Imports to Fill Fuel Shortage.

China Triples Coal Imports to Fill Fuel Shortage.

Chinese imports increased faster than its exports in November, thanks in part to a massive injection of fuel shipments, particularly coal, to cope with recent power outages and fuel shortages.

Overall, China increased imports 31.7%, to $253.8 billion, while exports grew 22%, rising to $325.5 billion, cutting the country’s trade surplus with the rest of the world just a little ahead of China’s 20-year anniversary of joining the World Trade Organization.

The country of 1.4 billion formally adhered to the WTO on December 11, 2001. That year, China was only the world’s fourth biggest exporter, sandwiched between France and Canada, according to Trade Data Monitor, the world’s premier source of trade statistics. This year, China is by far the world’s top exporter, shipping out roughly twice as much value in product as the second-place nation, the U.S.

In 2001, China was also the world’s fourth biggest importer, giving hope to European and American political and business leaders that it would become a major consumer market for Western companies. Instead, what happened is that the same manufacturing plants built in China to export products to Europe and the U.S. are also selling domestically to Chinese consumers.

The rise of protectionism in the West and the risks highlighted by the Covid-19 pandemic have caused manufacturers to diversify their supply chains across Asia. As a consequence, Chinese shipments of mobile phones, the ultimate complicated manufactured high-tech consumer good, fell 19.7% in November to $16.5 billion from $20.6 billion. The country still shipped out 88.7 million phones, but that was a 18.8% decline from 109.2 million a year ago. Overall, China exports of high-tech goods rose 14.8% year-on-year to $98.3 billion from $85.6 billion. The proliferation of new supply chains across Asia is why Chinese imports from ASEAN countries rose 34.9% to $38.5 billion from $28.5 billion, the biggest jump in imports from any major region. By comparison, imports from the U.S. rose 22.1%, to $17.8 billion from $14.6 billion, while shipments from the European Union imports increased only 6.8% to $27.3 billion from $25.6 billion.

Exports to the U.S. nudged, up only 5.4%, to $54.7 billion from $51.9 billion in November 2020, cutting Washington’s trade deficit. Exports to ASEAN countries increased 22.9% to $47.8 billion from $38.9 billion, while shipments to the EU rose 34.1% to $50.1 billion from $37.4 billion.

One more sophisticated product that China is steadily buying more of from outside is pharmaceuticals. Imports of pharmaceuticals increased 20.6% to $4.2 billion from $3.5 billion a year ago.

Despite the spread of new variants, the working-from-home economy is subsiding a little bit. Exports of furniture from China increased only 2.1% in November to $7 billion from $6.9 billion a year ago.

Inflation continues to distort trade statistics. Chinese imports of soybeans, for example, declined 10.6% to 8.6 million tons, from 9.6 million tons a year ago, while shipments of soybeans by value increased 26.9% to $5.1 billion from $4 billion a year ago. The Chinese car industry continues to develop, diminishing its need for imports. Exports of motor vehicles almost doubled, rising 99.2% to $3.6 billion from $1.8 billion. Chinese imports of motor vehicles declined 24.4% to 81,000 from 107,183. By value, the fall was only 2.1%, slipping to $5.3 billion from $5.5 billion, suggesting that it’s buying more high-end, particularly electric, vehicles.

The appetite for electric is in part for an energy shortage underscored by November’s trade data.

China more than tripled imports of coal by quantity, hiking purchases to 35 million tons in November, up from 11.7 million tons in the same month a year ago. By value, shipments grew a whopping 761.8%, rising to $5.9 billion from $681 million. Natural gas imports rose 17.8% to 10.7 million tons from 9.1 million tons a year ago. By value, they increased 169.8%. At the same China cut crude oil imports 8% to 41.8 million tons from 45.4 million tons, although imports by value rose 73.7% to $24.6 billion from $14.2 billion.

The energy purchases are part of China’s apparent strategy to diversify energy imports, according to an analysis by TDM. During the first 10 months of 2021, China bought over a billion dollars’ worth of fuel from 30 different countries, and over $10 billion each from 12 countries. These Chinese super-suppliers of energy are, in order: Russia, Saudi Arabia, Iraq, Oman, Malaysia, Angola, the U.S., Indonesia, the UAE, Kuwait, Brazil and Australia.

China’s top sources of coal are Indonesia, Russia, Mongolia and the U.S. In particular, it’s been ramping up shipments from the latter. Chinese coal imports from the U.S. increased 993.4% in the first ten months of 2021, to 8 million tons, from 733,789 tons over the same time period in 2020, according to TDM data. Imports from Indonesia leapt 60.3% and those from Russia grew 82.2% while shipments from Mongolia fell 43%.