According to Hong Kong’s CNN business news, up until the corona virus pandemic toppled the entire world, China was surpassing major world economies and with this status core it seems China has an advantage of the on-going trade-war with the United States.
According to official customs data released on Thursday 14th January 2021, China having the world’s 2nd largest economy locked out for the year 2020 with an overall surplus of US$78 billion for the month December whilst and recorded an overall surplus of $535 billion for the month of December, which is a 27% increase as against 2019. Exports in the meantime was at an all-time high.
“Amid all the noises on de-coupling and de-globalization, somewhat unexpectedly, the pandemic has deepened the ties between China and the rest of the world,” wrote Larry Hu, chief China economist for Macquarie Capital, in a research report.
According to Louis Kujis, the Head of Asia Economics at Oxford Economics, the manner in which the Chinese Government controlled the pandemic which broke out in the city of Wuhan, contributed vastly towards the country’s gain. He further added that, China benefitted from the overwhelming demand for protective gear and electronics as people were required to work from home.
“After having recovered from its own Covid-19 crisis, China was open for business when the pandemic triggered huge demand in the US (and other countries) for Covid-19 related goods,” Kuijs said.
With the trade surplus between Beijing and Washington rising to $317 billion in 2020, which is a 7% increase compared to that in 2019 and recorded 2nd highest, according to Iris Pang, , Chief Economist for Greater China at ING, while this amount is $7 billion short of the 2018 level, the trade relationship with the United States has become even more extreme with President Trump initiated an intense trade war what in his words is called a “lop sided relationship with the world’s second largest economy.
“Judged by the surge of US imports from China in 2020, it seems fair to say that Trump’s trade war with the country failed,” Kuijs said.
Encouraging trade news was expected days before China is to announce its GDP figures for the year ended 2020. According to Analysts, it is expected that China’s economic growth will have an upward trend in the last 3 months of the year and as per the Analysts polled by Reuters, the Chinese GDP should increase in the vicinity of about 2.1% for 2020.
“As [China] plays a critical role in many supply chains and remains a fundamentally very competitive place to produce, it is much easier said than done to ‘decouple’ from it,” Kuijs said.
According to Analysts, there is a possibility that President-Elect Joe Biden won’t undo some of the pressures the country is facing. This being said, Chinas future outlook remains without challenges.
