China Exports Jump By Most Ever As Global Economy Redlines

 

China's exports surged by a record 60.6%Y/Y in January-February, and smashing expectations of 40%, in part due to the one-year anniversary of China's shutdown last February when covid first emerged, but also thanks to the soaring global economy which at least in the US, grew at the fastest pace on record in February according to Goldman's GSAI index.

The reason why Jan and Feb are lumped together is that the first two months are normally volatile for China’s economic activity because of the week-long Lunar New Year holiday, which fell in February this year. The figures are even more distorted this time around because of the comparison with 2020, when factories and businesses were shut to contain the coronavirus outbreak in the early part of the year. Exports plunged 17.4% in the first two months of last year.

Here are the details from China's General Administration of Customs:

  • Exports jumped 60.6% in dollar terms from a year earliermore than 50% higher than the median estimate of 40% median, with February exports alone more than doubled from last year. The implied sequential growth, which compares to an 18.1% increase Y/Y in December, accelerated to +4.5% mom in January-February vs. +0.7% in December (RMB-denominated exports surged +50.1% yoy in January-February vs. +10.9% yoy in December.)

  • Imports also grew more than expected by 22.2% yoy in January-February. In sequential terms, exports growth accelerated to +4.5% mom sa non-annualized in January-February (vs. +0.7% in December). Imports expanded by 9.8% mom sa non-annualized in January-February vs. +2.1% in December. (RMB-denominated Imports surged +14.5% yoy in January-February vs. -0.2% yoy in December.)

  • China's trade surplus was US$103bn in January-Februaryroughly double the Bloomberg consensus of $59BN, and up from $78.2BN in December. 

By major export destination, exports to the US surged 87.3% yoy in January-February (vs. +34.5% yoy in December) and growth of exports to EU accelerated to +62.6% yoy from +4.3% yoy in December. In contrast, exports to Japan and Korea rose +47.7% yoy and 49.0% yoy, respectively. Exports to ASEAN rose 53% yoy and exports to Vietnam rose most significantly by 78.2% yoy among ASEAN economies.

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