Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ China is winning the trade war and its exports have never been higher

China is winning the trade war and its exports have never been higher

The world’s second largest economy closed in 2020 with a total trade surplus of $ 78 billion in December, according to official customs data released Thursday. China’s total profit for the year hit a record $ 535 billion, up 27% from 2019. Meanwhile, exports rose to a record high.

“Amidst all the noise of de-coupling and de-globalization, somewhat unexpectedly, the pandemic has deepened ties between China and the rest of the world,” wrote Larry Hu, China’s chief economist for Macquarie Capital, in a statement. research report.

Louis Kuijs, head of Asia’s economics at Oxford Economics, attributed China’s gains largely to the country’s management of the pandemic that erupted in the Chinese city of Wuhan just over a year ago. He added that China has benefited from a huge demand for protective equipment and electronics as people around the world worked from home.

“After recovering from its own Covid-19 crisis, China was open for business as the pandemic triggered a huge demand in the United States (and other countries) for Covid-19-related goods,” Kuijs said.

Meanwhile, China’s trade relations with the United States became even more unbalanced: Beijing’s trade surplus with Washington rose to $ 317 billion by 2020, a 7% increase from the previous year and the second-highest amount recorded, according to Iris Pang, chief economist for Greater China at ING . The amount is only 7 billion. $ Shy from the 2018 level when Trump launched a blistering trade war to correct what he called a skewed relationship with the world’s second largest economy.

“Judging by the rising US imports from China in 2020, it seems fair to say that Trump’s trade war with the country failed,” Kuijs said.

The good trade news comes days before China is expected to release GDP figures by the end of 2020 – another likely positive outlook. Analysts broadly expect China’s economic growth to increase even more over the last three months of the year. Analysts polled by Reuters expect Chinese GDP will increase by 2.1% throughout 2020.

“As [China] plays a critical role in many supply chains and remains a fundamentally very competitive place to produce, it’s much easier said than done to ‘disconnect’ from it, “Kuijs said.

However, China’s future is not without its challenges. Analysts point out that President-elect Joe Biden is unlikely to turn around any of the pressure on the country after he takes office next week.

“The Biden government will take a different, less belligerent and more stable approach to China,” Kuijs said. “But it is politically not possible for Biden to remove tariffs on Chinese goods soon.”

Source link