Reviving from the COVID Slump in China

Trade Surplus of 150 Trillion Won in January-February This Year

Source: WSJ

[Asia Economy Reporter Yujin Cho] As demand for Chinese products from the United States and Europe continues to rise, China is rapidly recovering from the COVID-19 economic downturn, the Wall Street Journal (WSJ) reported on the 6th (local time).

The General Administration of Customs of China announced that exports in dollar terms for January to February increased by 60.6% compared to the same period last year, significantly exceeding market expectations (40%). Imports also rose by 22.2% year-on-year, surpassing market expectations (16%).

The trade surplus reached $132.5 billion (approximately 150 trillion KRW), of which the trade surplus with the United States accounted for $51.3 billion (approximately 58 trillion KRW), an 81.3% increase compared to the same period last year.

The sharp increase in exports and imports from January to February is analyzed to be due to the base effect of many factories closing last year due to the outbreak of COVID-19, combined with improved demand from the United States and Europe.

Amid the global continuation of remote work due to COVID-19, exports of semiconductors, mobile phones, and other computer and electronic devices, as well as transportation equipment, increased, along with imports of related parts, resulting in a special demand boom. The General Administration of Customs of China explained that the increase in working days during the Chinese Lunar New Year (Chunje) period, due to COVID-19 travel restrictions, also supported the trade growth.

Among major economies, China, which was the first to achieve economic recovery from COVID-19, was the only country to achieve positive growth.

Meanwhile, on the 5th, China set its 2021 economic growth target at "6% or above" in the government work report at the National People's Congress (NPC). Premier Li Keqiang presented the economic growth forecast of over 6% this year based on confidence in controlling the COVID-19 situation during the NPC work report on the 5th.

Last year, no economic growth forecast was presented due to domestic and international uncertainties. Director He Lifeng emphasized the economic recovery, stating, "Looking at the current trend, China's exports will increase significantly every month," noting that the manufacturing Purchasing Managers' Index (PMI), a leading economic indicator, has remained above 50, and electricity consumption and power generation have increased.

Director He also mentioned the draft of the 14th Five-Year Plan, which includes the goal of surpassing the United States, adding, "It contains specific indicators for economic development and innovation, people's welfare, and green ecology, and the action plans for these are also detailed."