China’s foreign trade in Q1 2021. Graphic: GT
China’s foreign trade volume surged by a significant 29.2 percent year-on-year to reach 8.47 trillion yuan ($1.29 trillion) in the first quarter of 2021, getting off to a robust start fueled by rising global demand for a wide variety of Chinese commodities from daily necessities, medical gear, machinery to work-from-home electronic devices.
Analysts expect China’s foreign trade to continue the upward streak in the second quarter, but could pare down in growth rates, as geopolitical uncertainties and an overall price elevation in raw materials and bulk commodities are set to drive up the cost.
They predicted that China’s whole-year trade growth will hover around 9-10 percent, once again underpinning the country’s rapid economic rebounding from the coronavirus pandemic in 2020.
In the first three months of 2020, China’s foreign trade slumped 6.4 percent year-on-year to merely 6.57 trillion yuan, due to a very strict lockdown imposed by China’s central government to stifle spreading of the novel coronavirus.
“China’s first-quarter foreign trade figure looks rosy, which was partly aided by the low base last year. But even if such factor is excluded, the recovery momentum remains robust,” Tian Yun, vice director of the Beijing Economic Operation Association told the Global Times, pointing to strong external demand that is driven by huge fiscal and financial stimulus plans in many economies.
In breakdown, China’s exports with the US recorded a 61.3 percent growth in the first quarter to 1.08 trillion yuan, the fastest growth among all trading partners. The US is China’s third largest trading partners behind the EU and ASEAN, climbing 36.4 percent and 26.1 percent, respectively.
In 2020, the US dropped to China’s third-largest trading partner, thanks to the boiling trade war initiated by Washington, seriously disturbing the global economy.
Analysts said that the trade figure bodes well for the country’s first-quarter economy, which some expect to have expanded by 18 percent year-on-year. China will release its GDP for the first three months on Friday.
“In a conservative projection, China’s 2021 GDP growth will continue the V-shape recovery, which is expected to reach 9 percent,” Tian said. That will bring China’s economy at the year-end to reach 110 trillion yuan this year.
Lian Ping, head of Zhixin Investment Research Institute, told the Global Times that the external rising demand for made-in-China commodities will continue powering the economy in the second quarter and the second half of the year. However, he cautioned that as other emerging economies resume production with the gradual rollout of coronavirus vaccines, some trade orders will be diverted from China.
The volatile global geopolitical situation may also weigh on China’s exports, Lian said, such as recent US muckraking Xinjiang cotton, which he said could result in a 20-percent drop in China’s textile exports to the US, Europe and Japan.
China posted a 50.1 percent year-on-year growth in its exports during the first two months of 2021, earlier customs data showed.