China enjoys surge in trade

Imports and exports shoot up in March

China’s imports and exports boomed again in March, data showed yesterday, reaffirming the recovery in the world’s second-biggest economy continues apace and demand picks up in key overseas markets as they emerge from last year’s coronavirus pandemic.

The readings highlight the impact of vaccines and the easing of containment measures are having, with expectations for further improvement over the next few months.

Imports soared a forecast-busting 38.1% on-year as the country’s army of consumers increasingly return to some form of normality after the pandemic forced businesses to shut down and people to stay at home.

The figure was a huge increase from the 22.2% rise seen in January-February and the biggest hike since February 2017.

Exports rose 30.6%, well off the 38% increase tipped in a Bloomberg forecast but still among the highest readings since early 2018. Overseas shipments jumped more than 60% in

January-February.

The outsized increases are down to the fact that they are compared with a low base level from last year, when the pandemic was at its height in China and spreading elsewhere.

Iris Pang, ING chief economist for Greater China, said export numbers were “very distorted”.

But a key factor behind the imports spike was electronics shipments, she said, noting that Taiwan’s recent water shortage had hampered its ability to produce at overcapacity.

“They are exporting some semiconductor parts to (mainland) China, to finish production there,” Pang said.

Integrated circuit imports surged 33.6% in the first quarter, while that of diodes and similar semiconductor devices rose more than 50%, customs data showed.

“We’re still seeing stocking up ... in terms of electronic integrated circuits”, said OCBC Bank’s head of Greater China research Tommy Xie.

This suggests preparation for a potential technology war between China and the United States or further tensions between the two countries.’’

A rise in commodity prices recently would also have bumped up import values, analysts said.

China’s overall trade surplus was $13.8 billion in March, the customs data showed, while its surplus with the United States slipped to $21.37 billion from a $23.01 billion in February.

The US trade surplus was a key point of contention during the trade war with former US President Donald Trump.

“China has demonstrated very resilient growth, to become the global industrial powerhouse supplying goods during the pandemic,” Xie said.

He added that this was likely to continue, given constraints on supplies globally and international demand picking up as the economic outlook improves.