By Gina Lee
Investing.com – China saw the biggest surge in November exports since February 2018, benefiting from a recovery in global demand. Imports also saw growth.
Data released earlier in the day showed that exports increased 21.1% year-on-year in November, much higher than the 12% growth in forecasts prepared by Investing.com and October’s 11.4% growth. The trade balance also grew to $75.42 billion in November, against the forecast $53.50 billion and October’s figure of $58.44 billion.
Meanwhile, imports grew 4.5% year-on-year in November, missing the predicted 6.1% growth and October’s 4.7% growth.
The latest data attests to a continuous Chinese economic recovery from the COVID-19 pandemic. Data released earlier in the month showed the Caixin Services Purchasing Managers Index (PMI) at 57.8, and the Caixin manufacturing PMI at 54.9 respectively in November. The manufacturing and non-manufacturing PMIs for November came in at 52.1 and 56.4 respectively.
Virus waves in places such as the U.K., Europe and the U.S. could further increase demand for exports of personal protective gear and work-from-home devices, both key drivers of export growth so far.
However, fresh restrictions could also curb global growth and demand, which will inevitably weigh on exports. “The new lockdown in Europe may bring downward pressures to external demand over time,” UBS Group AG (SIX:UBSG) economists led by Ning Zhang said in a note ahead of the data release.
As 2020 draws to an end, China also needs to increase its imports from the U.S. in order to meet the terms of the phase-one trade deal between the two countries. However, the latest data indicates that China is nowhere close to meeting the target agreed on in the deal.
U.S. president-elect Joe Biden has said that he would not quickly remove the tariffs imposed by the incumbent Donald Trump administration. Biden will also consult allies before developing a China strategy.