China’s 31% March Trade Bounce Confirms Covid Comeback
It was March 2020 that marked the depths of the Covid-19 economic crisis. Factories closed. Shops shuttered. Consumer locked their doors and wallets.
Last month’s Chinese exports signals that the global economy has found its way back. Spring is here. Wallets are open. In March, Chinese exports increased 30.7% year-on-year to $241.1 billion. That’s significant because China is the world’s number one exporter, and principal manufacturer of consumer goods.
The rebound was driven by shipments to the world’s richest consumer markets in the U.S. and European Union, according to an analysis by Trade Data Monitor, the world’s top source of trade statistics. Chinese exports to the U.S. increased 53% to $38.7 billion. Shipments to the EU rose 46.2% to $36.6 billion.
Reports of the demise of global trade, amplified by the reporting around the Ever Given container ship getting stuck in the Suez Canal, have been greatly exaggerated. At the end of March, the World Trade Organization said that global trade would grow 8% in 2021, the highest pace since 2010.
And that growth is still driven by U.S. and EU companies and consumers, 800 million buyers eager for the computers, phones, shoes and toys China-based factories are making. Consider this: In the first quarter of 2021, Chinese exports to the U.S. totaled $119.2 billion, up 74.7% year-on-year, and those to the EU rose 56.7% to $110.2 billion. By comparison, exports to all of Latin America totaled $46.2 billion; to Japan, $38.7 billion; to all of Africa, $29.8 billion; and to India, $21.1 billion.
China is continuing to supply the world with work-from-home technology. Exports of high-tech goods increased 35% in March to $75.8 billion, and those of mobile phones rose 31% to $10.9 billion. It’s also still selling lots of the goods people need at home. Toy exports, for example, rose 38% to $2.5 billion. And people aren’t quite as ready as they could be to get back out on the road: Exports of bags and luggage increased 16% to $1.5 billion. One big signal that China’s industrial economy is roaring back to life: Exports of motor vehicles, a key goal of its industrial planners, increased a whopping 128% to $2.1 billion. China is also still making the gear we need to care for victims of disease: Exports of medical devices rose 39% to $1.5 billion.
China’s imports are now outpacing its exports, and it’s likely that it will soon pass the U.S. as the world’s biggest consumer market. In March, imports increased 38% to $227.3 billion. ASEAN countries formed the top category of suppliers, sending $33.1 billion of goods to China, compared to $27.5 billion for the E.U. and $17.3 billion for the U.S.
There’s good news for multinational companies in China’s March import numbers. The country ramped up its purchases of everything from cars to soybeans, suggesting that its markets may in fact be opening up more. In March, China increased its imports of high-tech goods 25% to $70.3 billion; imports of spare automobile parts 32% to $3.3 billion; and imports of plastics 49% to $6.1 billion. And China continues to honor the promise it made during last year’s phase one trade deal with the U.S. It ramped up imports of soybeans 129% to $3.9 billion.
The news may be even better than it appears for suppliers to China, because overall total of Chinese imports were deflated by downturns in fuel shipments. Imports of coal fell 1.8% to 27.3 million tons.