Around the world, families who have been spending more time at home due to the pandemic have responded by buying more furniture, consumer electronics and other goods made in China.
These purchases pushed China’s trade surplus to its highest level in over a year, according to data released by the Chinese government on Friday. The country’s surplus in December also significantly beat the highest single-month record set just two months earlier.
China’s trade surplus reached $94.5 billion in December, beating October’s record of $84.5 billion. The country’s positive trade balance for the entire last year rose to $676.2 billion.
China has carefully managed its trade in recent years. Xi Jinping, the country’s leader, urged China to become more self-reliant and avoid dependence on imports.
Beijing is focusing on developing globally competitive manufacturing industries, importing mainly raw materials to create as many well-paid jobs as possible within China’s borders. The government has also focused during the pandemic on helping Chinese companies become more competitive while avoiding consumer subsidies.
In contrast, governments in the West are placing more emphasis on providing direct subsidies to consumers who have used some of the money to buy more manufactured goods from China.
Chinese officials welcomed Friday’s trade data, saying it was in line with the country’s goals. “On the whole, the foreign trade of the 14th Five-Year Plan has made a good start,” Li Kuiwen, director of the Statistics and Analysis Department of China’s General Administration of Customs, said at a press conference in Beijing.
At the same time, the growing trade deficit with China has become a major drag on growth in the US and the European Union and has become a source of political friction.
Almost half of China’s trade surplus in December was with the US. The bilateral imbalance stood at $39.2 billion in December, slightly off the record $42 billion set in September.
President Donald J. Trump entered into a Phase 1 trade agreement in January 2020 that calls for a sharp increase in China’s imports from the United States in 2020 and 2021, followed by increases between 2022 and 2025. the first two years of the agreement. Chinese experts said the pandemic has disrupted normal trade flows.
China will not publish annual statistics on total production until Monday. But Western economists’ estimates, based on November data, show that a widening trade surplus is now the main driver propping up China’s economy as real estate and other sectors falter.