The country achieved a record foreign trade surplus in 2021.
(Photo: dpa)
Dusseldorf World export champion China has reported a record foreign trade surplus for 2021. Exports exceeded imports by $676.43 billion, Beijing Customs officials said on Friday. That is a good $152 billion more than in 2020. It is also the highest value since statistics began in 1950.
Exports, in particular, have risen more sharply than many experts had expected. These increased by almost 30 percent compared to the previous year. The main driver here was the corona-related demand for electronics for the home office and medical products such as masks.
Most recently, negative news about a real estate crisis, the effects of tech regulation and repeated corona lockdowns had caused concerns about the stability of the Chinese economy. At first glance, the report about the record export surplus does not seem to fit the picture.
However, the trade surplus reflects the problems in the Chinese economy, emphasizes Michael Pettis, finance professor at Beijing University. Lower government investment and falling consumption “had to be offset by an increase in the trade surplus”.
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Actually, China’s government had set the goal of promoting domestic consumption and domestic innovations as economic drivers and reducing dependence on state investments and exports. In this respect, the high export surplus is bad news for the government’s economic planners.
Stability as the ultimate goal
A better picture of the state of the Chinese economy should be available from next Monday. Then the national statistics office publishes figures on economic output, industrial production and retail trade. GDP is expected to have grown more slowly in the fourth quarter of 2021 than in the third quarter due to the real estate crisis and several corona lockdowns.
China’s deputy trade minister recently warned that his country would face unprecedented difficulties in the new year. He pointed out that other export nations are now likely to ramp up their production again.
At an annual central economic conference of the Chinese government in early December, economic planners emphasized the importance of ensuring stability in 2022. “We must recognize that China’s economic development is under the triple pressure of contracting demand, a supply shock and weakening expectations,” the official Xinhua news agency wrote in an official report of the meeting.
Despite booming foreign trade, China’s state economic planners had already lowered the growth target for the second-largest economy for 2022 to “more than five percent” in December Comfort zone falls,” predicted economist Tommy Wu of Oxford Economics. The central bank could loosen its monetary policy.
With agency material
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