China’s exports boomed in August, as trade surplus with the US widened by 27 per cent
- China’s exports grew by 9.5 per cent in August, while imports shrank by 2.1 per cent, as the country’s overall trade surplus narrowed
- China’s trade surplus with the United States widened by 27 per cent compared to a year earlier, despite vowing to buy more US products
China’s disjointed trade recovery continued in August, with exports growing for the third successive month, but imports continuing to disappoint.
Exports surged by 9.5 per cent from a year earlier, but imports fell by 2.1 per cent compared with August 2019.
While the overall trade surplus narrowed, China’s trade surplus with the United States rose 27 per cent in August from a year earlier, South China Morning Post calculations show.
This was the highest monthly export growth figure since March 2019, when exports surged by 14.2 per cent.
But imports shrank for the second month in a row in August from a year earlier, and were worse than the Bloomberg median forecast of 0.2 per cent growth. This was also down from minus 1.4 per cent in July and means China’s imports have only grown in one month this year, June.
The country’s trade balance narrowed to US$58.93 billion, from US$62.33 billion in July. This shows that the gap between export growth and import growth remains significant and poses an ongoing headache for policymakers in Beijing.
August shipments to the United States jumped 20 per cent from a year earlier to US$44.8 billion, while imports of US goods rose by 1.8 per cent to US$10.5 billion.
China reported a trade surplus of US$34.2 billion with the US in August, up 27 per cent from a year earlier. This was also wider than the US$32.46 reported in July.
“It has really picked up since the start of July,” said Darin Friedrichs, commodity analyst at StoneX in Shanghai, who pointed to “fast-paced” purchases of both soybeans and corn. “So while we’re not on track to reach the dollar value goals, the purchases of bulk commodities have increased pretty dramatically in the past two months.”
Even so, Reuters reported last week that while US exports of soybeans to China have increased, sales between January and July 2020 were the lowest since 2004, and while August’s volumes have bounced back with an 18 per cent rise year on year, they are the lowest since 2008 if last year was excluded.
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This saw China’s purchases of Australian goods plunge 26.2 per cent from a year earlier, even as exports to Australia jumped 24.4 per cent, The Post’s calculations show. This means China’s trade deficit with Australia narrowed by 48.1 per cent year on year in August to just US$4.3 billion in August.
It is widely suspected that the motivation for these trade actions are political. Australia’s government has been among the most vocal proponents of an investigation into the origins of the coronavirus pandemic, which was first detected in the Chinese city of Wuhan.
As with previous months, exports of medical devices remained strong, growing 38.4 per cent to US$1.04 billion in August from a year earlier. Exports of electronic goods were up 11.8 per cent to US$137.9 billion from a year earlier, marking a continuing trend where the shipment of goods popularly used in lockdown help buoy China’s trade economy.