China Trade Surplus hits record US$75 Billion as November Exports Soar
WHAT IS TRADE SURPLUS?
Let’s see according to the world wide web the meaning of the word surplus means More/ extra. Trade is the buying and selling of items. If any country sells more to other countries than it buys from. It means that the country has a surplus. But wait what if the country trades more but earns less. That will not count as surplus to explain it better we can see Trade as an amount of money.
In other words, the country has more money and when we talk about money, we define trade between countries by exports and imports. So, for a country to have a surplus the amount of money by which a country’s exports need to be greater than its imports.
When we talk about trade, we always remember the image of made in china is our head. This is true for almost 90 percent of the world’s products. Most of the brands around the globe use Chinese labor to manufacture their products.
WHERE DOES CHINA IF INTO ALL THIS?
China is the world’s largest exporter of all items. It has the cheapest labor with the best expertise the largest population to fill up any gaps in the supply chain. Also, it is the paradise for the production of any item for millions of brands across the globe. It even has the best policies to encourage foreign investment in Chinese soils. This makes the local population of china richer as the number of factory workers means that they can fend off poverty.
RECENT ECONOMIC ADVANCES OF CHINA
China’s exports have risen sharply in November faster than in the previous three years.
Strong demand for goods on the global market was needed to withstand the pandemic. This is what propelled the world’s second-largest economy and gave a trade surplus.
A speedy recovery for factories in China from the coronavirus shutdowns. Many of which were are still struggling with outbreaks. Exports in November rose from an average of 21.1 percent from a year earlier. Customs data showed on Monday (Dec 7). The fastest growth since February 2018. It also soundly beat analysts’ expectations for a 12 percent increase and quickened from an 11.4 percent increase in October.
These strong exports also come during the yuan hovering at its peak in recent years. This peak comes against the dollar and yuan battle over the international stage. This would-be welcome news for policymakers. This is a concern about the impact of a try to weaken the green back of the Chinese economy.
Imports increase to 4.5 percent year-on-year in November which is slower than October’s which saw a 4.7 percent growth. Underperforming expectations were excepted from this year but due to the unforeseen virus, the demands sharply rose for many items which caused a great increase in sales. This marks the third month in which sales have increased in Chinese products. This sale was losing momentum during the pandemic after almost a year the demand was seeing a decline due to the decreasing cases.
This can however turn around with more cases. It was also bigger than the forested surplus. It was supposed to be around US$53.5 billion.
China’s exports were increased by the overseas demand for personal protective equipment (PPE). Electronics products demand is at an all-time high because of the work from home environment. Also, the seasonal Christmas demand contributed to this growth.
Booming sales of electronics like home appliances and kitchen appliances for households across the locked-down world have helped propel China’s manufacturing engine back to life.
Super-charging demand for key items like metals like iron aluminum and steel products are at a wholesome high. This helps in increasing the sales of the overall economy.
Another sign of booming trade is China’s export surge. Along with the low return rate of containers from other countries has begun a shortage of exporting containers for china.
Manufacturing surveys show a dramatic increase in the pace of goods for many industries. Some firms reported that strong yuan increased profits by reducing the exported goods and their orders in November.
THE RISE OF THE CHINESE CURRENCY
The yuan has six straight months of increases and this is the longest win streak for the currency. This is previously recorded in the year 2014 is trading at 2 and a half year highs.
The strong exports have widened the gap between the United States which is at US$37.42 billion in November. Chinese buyers have increased purchases from the US. Farms need soybeans produces to fulfill China’s pledge in the initial trade deal. This is the deal signed with the United States. Although China’s imports were smaller than expected. This led to good results because of the recent spike in prices and the increase in volumes. This continued to rise on a sequential basis.
“We expect goods imports to improve in the year 2021 and further increase in the coming years. Underpinned by strong domestic demand. China’s iron ore and copper imports both declined in November. Crude oil imports advanced and it helped in the economic reports.
With these advances in the technological aspects, it is no surprise the sharp rise of the chine economic machine. This is why people have begun to compare the Chinese as the economic rivals of the US.
This is partly due to the declining American economy and also the rising of the Chinese vision of a global village supplied by Chinese materials. This vision of economically dominant China is being carried out. Right inform of our eyes and in just a few years might be the case. If such a case appears it will be apparent that the new superpower of the world might be the rising beast of the alias. This was a brief review of the China trade surplus hits record US$75 billion as November exports soar.