InvestorQ : How come China’s exports are growing so rapidly in the aftermath of the pandemic?
Archita Jajjoo made post

How come China’s exports are growing so rapidly in the aftermath of the pandemic?

Niti Shenoi answered.
8 months ago

It is actually quite surprising as to how China is able to grow its exports so rapidly. One view is that China is paying a premium for containers and it has been cornering the containers across most of the world sea routes. This has led to a shortage of containers in the world and India has also been one of the sufferers. But the truth remains that the Chinese bounce back in trade has been nothing short of phenomenal.

Let us get to the numbers. China's Feb-21 exports grew at a record pace compared to the year ago period even as the rise in imports was a lot more subdued in relative terms. On a yoy basis, Chinese exports grew by 155% compared to the Feb-20 period, although it can be said that the growth was on a much smaller base as the pandemic had put huge constraints on world trade in the same period last year.

But the positive cues for China came from imports which were up by just 17.3% in the month of Feb-21. This could have substantial positive implications for the trade surplus of China. In fact, the Chinese economy has already posted a trade surplus in merchandise trade to the tune of $103 billion just in the first two months of the years and is indicative of how China is using exports as a lever to grow its economy out of trouble.

During the Jan-Feb period of the current calendar year, exports jumped 60.6%, substantially better than the 38.9% growth projected by Reuters. Clearly, there is a massive surge in global demand for Chinese inputs and other intermediary products as factories in the US and in Europe started getting churning out products at normal level once again. Clearly, the idea of China positioned as the factory of the world appears to be helping in a big way.