US Estimates China Trade Deficit at 81 Trillion Won in Q1... Concerns Over Growing Trade Deficit

China's Q1 Exports to the U.S. Increase 61.3% Year-on-Year to 185 Trillion Won
Chinese Media Describe China-U.S. Relations as 'Politically Cool, Economically Warm'

[Asia Economy Beijing=Special Correspondent Jo Young-shin] China's exports to the United States surged by more than 61% in the first quarter of this year, according to preliminary estimates. Despite the Biden administration's intensified pressure on China, trade between the two countries has been increasing.

In this regard, Chinese media have pointed to this as evidence of the economic entanglement between China and the U.S., forecasting that trade volume between the two countries will increase by 20-30% this year regardless of political conflicts.

China's state-run Global Times cited the General Administration of Customs' first-quarter export-import statistics, reporting on the 14th that China's exports to the U.S. reached 1.08 trillion yuan (approximately 185.3 trillion Korean won) by March this year. This represents a 61.3% increase compared to the same period last year, the highest growth rate among trading partners. Exports to the European Union (EU), China's largest trading partner, increased by 36.4% year-on-year, while exports to ASEAN, the second largest trading partner, rose by 26.1%.

The Global Times estimated that with the significant increase in exports to the U.S., America's trade deficit with China in the first quarter would reach 474 billion yuan (approximately 81 trillion Korean won).

Tian Yun, Vice Chairman of the Beijing Economic Operation Association, stated, "The trade between the two countries can be interpreted as the Biden administration's intention not to sever economic cooperation with China," adding, "This year, China-U.S. relations will be 'politically cool but economically passionate.'"

The Global Times analyzed that the astronomical fiscal policies of the U.S. are the biggest cause of the increase in exports to America, attributing the rise in China's exports to the U.S. to increased demand resulting from the U.S.'s quantitative easing policies. It forecasted that China's trade volume with the U.S. would increase by 20-30% compared to last year, and that the U.S. would contribute 7 percentage points to the overall growth of China's foreign trade this year.

The media outlet also offered a political interpretation regarding China-U.S. trade, stating that the root cause of China-U.S. conflicts is the China-U.S. trade war, but the export statistics show results completely different from the U.S. policy aimed at reducing the trade deficit.

He Weiyuan, a former official of China's Ministry of Commerce, pointed out, "The increase in exports shows the U.S.'s dependence on Chinese products," adding, "The statistics mean that politics cannot overcome economics."

Chao Heping, a professor in the Department of Economics at Peking University, explained, "The increase in China's exports indicates that the production capacity of major global economies, including the U.S., is still recovering at a slow pace," and that the increased demand from the U.S. is flowing into China.

Kong Yi, a professor in the Department of Financial Economics at Tianjin University, emphasized, "The China-U.S. economies are complementary in many aspects," and "The two economies cannot be separated."

Vice Chairman Tian noted, "Since the pandemic, the core of trade between the two countries has been in the electronics and machinery sectors," adding, "In these sectors, the U.S. will not be able to find substitutes from emerging countries other than China."

Concerns are emerging that the Biden administration's large-scale stimulus measures could increase the trade deficit with China. The South China Morning Post (SCMP) reported on the 12th that the Biden administration's massive stimulus could increase U.S. imports from China by $30 to $40 billion this year. Derek Scissors, a researcher at the American Enterprise Institute (AEI), expressed concern, saying, "If the U.S. economy recovers rapidly and nominal GDP increases by 9%, the U.S.-China trade deficit could reach $500 billion."

Meanwhile, China's total exports in the first quarter of this year were recorded at $709.98 billion (approximately 799 trillion Korean won), a 49% increase compared to the same period last year. Imports rose 28% year-on-year to $593.62 billion.