Biggest Surge in China’s Imports Since the Outbreak of the Pandemic as Economy Rebounds
All industrial sectors were majorly impacted due to the coronavirus pandemic, which led to halted operations and disturbed production lines, creating an imbalance between the supply-demand chain. The shortage of manpower caused by the travel restrictions delayed the operations to another extent, which caused an increase in the prices of various goods. However, with COVID-19 cases being contained, the global economy is set to make a come-back, and China, as a nation with minimal imports during the lockdown phase, has now increased its imports significantly as the rising economy facilitates this growth.
China’s trade economy grew significantly throughout the month of September, with the Chinese customs bureau announcing its strongest increase in imports since December last year. This has made monthly inbound shipments reach an all-time high of USD 203 billion.
Imports were increased by 13.2% in the last month as compared to a year earlier and have been estimated to grow at a constant rate of 0.4%. This was above the 2.1% contraction faced in the month of August and was a surprising turnaround.
Not just imports but exports also grew by 9.9% in the month of September as compared to a year before. It was slightly up from August’s 9.5% growth. This was the fourth successive expansion but it was considered to be lower than the expected growth at 10%. This growth in the exports sector is the strongest that has been recorded since March 2019, when exports expanded by 14.2%.
Such an increase in imports and exports has come amid rising consumption abroad, as the markets reopened from the COVID-19 lockdowns, boosting China’s shipments.
The biggest trade relation between the United States and China shot straight up in the month of September, with China’s American import rising 24% from a year earlier to USD 13.2 billion. The surge in imports was slightly facilitated by the food shipments as China’s grain imports rose 35% from a year earlier, while China’s inbound meat compound rose 17.6% as compared with September 2019 to USD 3.7 billion. This year, China’s domestic food supply has received a major blow due to flooding and inclement weather, which has resulted in increased imports of American farm goods since the past few months, further focusing on meeting import targets laid out in the phase one trade deal.
As import prices are still lower in comparison to the last year, this implies that there has been a robust year on year import volume growth in September, which is expected to be around 20%. With the increasing domestic demand, China is expected to witness a robust growth in the coming years as well.
The number of shipments to the ASEAN group of nations also increased by 14.4% from a year before.
Currently, while China is slowly improving its imports, parts of Europe and the United States are facing renewed surges in cases of the virus, with lockdown measures and social distancing being reintroduced in various degrees. This change in the European and the United States’ economy might or might not affect the Chinese economy. However, in the second and third quarters, China seems to have benefited from the lockdowns around the globe. Some benefits included increased sales of electronics as people started working from home and exporting 43.8% of all the personal protective equipment sold in the middle of 2020.
Meanwhile, with the government easing lockdown restrictions, China imported more soybeans, semiconductors, copper, and steel products in the month of September.
According to the statistics, the demand for inspections and audits is expected to grow in the third quarter by 43% in the electricity and the electrical sectors and by 56% in house appliances compared to the previous year. However, the demand from the US and European buyers increased by 15% in the third quarter from a year ago. This reflects a pan-Asian manufacturing recovery. China’s imports have been significantly driven by such factors; thus, the changes made in the world economy will affect China’s imports by fluctuating their domestic demand.