China, the world’s second largest economy, saw its exports soar in November by the largest amount in nearly three years.
Data released early on Monday morning showed that exports grew 21.1% year-on-year in November. Last month’s figures were considerably higher than the 12% growth forecast by analysts and nearly double the growth from October’s 11.4% increase.
Also increasing was imports which saw a 4.5% growth year-on-year in November. Last month’s figures were below market estimates for 6.1% growth and slightly down on October’s 4.7% growth.
The difference between the imports and exports trade balance also grew to $75.42 billion in November. This was the largest trade surplus since records began in1990. Last month’s figure was far higher than the market forecasts for a $53.50 billion surplus and a big leap from October’s figure of $58.44 billion.
Rebounding Economy
November’s exports figure was the fastest growth since February 2018 and points to a Chinese economic rebound that remains on track. The growing, albeit slowly, domestic demand also indicates an improving economy.
China, the origin of the coronavirus pandemic, was the first to shut down factories in a lockdown. However, since reopening factories and ending lockdowns there, economic conditions have consistently improved.
During the global lockdowns booming sales of household electrical appliances, and office electrical equipment as the world moved to remote working, have helped kickstart China’s manufacturing engine back to life.
There has also been massive demand from overseas for personal protective equipment (PPE), whilst Christmas seasonal demand is rapidly gaining momentum. All of which indicates better times ahead for the Chinese trade surplus.
Nomura analysts echoed this, saying in a note:
“We believe China’s export growth could remain elevated for another several months due to the worsening COVID-19 situation overseas,”
Indeed, the latest wave of the pandemic in Europe, the U.K. and elsewhere could further fuel demand for more PPE and work-from-home devices from a China willing and able to export them.
