Why 2021 is the Year of the Asian Economy - Official May China Trade Data Analysis
Official China Trade Data Analysis by John W. Miller, Chief Economic Analyst, Trade Data Monitor - May 2021 China Preliminary Data by Major Products & by Country/Region
Asia is really humming. Chinese exports of goods to top Asian trading partners boomed in May, suggesting that the continent is blowing past Europe and the U.S. in 2021 in the speed and scale of its recovery from the Covid-19 pandemic.
Chinese exports to the 10 members of the Association of Southeast Nations, or ASEAN, a trading bloc of over 650 million people, increased to $39.2 billion, up 41.3% in May compared to the same month a year before. Asian countries managed their response to Covid better than governments in the U.S. and Europe.
By comparison, shipments to the European Union rose only 13% to $39.9 billion. And exports to the U.S. went up 20.3% to $44.9 billion. Overall, Chinese exports increased 27.9% to $263.9 billion. That was lower than economists expected, partly due to an outbreak of Covid-19 cases at ports in Shenzhen and Guangzhou, and a shortage of semiconductors, a key component in the manufacturing of electrical and electronic goods.
Economist reports tend to focus on China leading the global economy out of the depths of the 2020 Covid-19 pandemic that has killed almost four million people. But the truth is that it is the entire Asian continent that has been performing above par. China’s biggest trading partners on the continent all ramped up imports in May: Vietnam (up 40.5% to $12 billion); Malaysia (up 52.8% to $5.9 billion); Thailand (up 49.6% to $6 billion); Indonesia (up 78.2% to $4.5 billion); and the Philippines (up 94% to $4.9 billion). This suggests bustling economies where consumers are confident, shops and factories open, and people fully recovered from the pandemic.
Meanwhile, China continues its path toward beating out the U.S. to become the world’s top importing country. Chinese imports increased at their highest rate in a decade in May, rising 51.1% to $218.4 billion. By comparison, the U.S. imported $237.3 billion of goods in March, the last month for which its data is available.
To be sure, that eye-popping Chinese import number is partly due to a surge in prices for iron ore, coal, copper, and other commodities. China’s imports of iron ore, for example, increased 101.1% by value to $15.6 billion, but only 3.3% by volume. Imports of soybeans increased to $5.1 billion, up 42% in value, but only 2.5% in quantity. Imports of coal and crude petroleum even increased by value while declining by quantity.
But China also bought real goods made by Western companies with specializations in products China doesn’t make. Imports of pharmaceuticals, for example, rose 33.2% to $3.6 billion. Imports of cosmetics and clean-care products increased 19.1% to $2.1 billion. And shipments of high-tech products into the country, for consumer goods and supply chains combined, increased 31.3% to $66.1 billion.
Overall, China’s trade surplus for the month was $45.5 billion, an increased from $42.9 billion in April.
During the Covid-19 pandemic, China benefited from an important global trend. As people moved their workplaces into their homes and cocooned, they bought Chinese-made electronics, toys and furniture, while cutting back on luggage, shoes and gasoline. That trend is now fading, even as China maintains its dominance of electronics. China increased its exports of high-tech products 16.2% to $72.9 billion.
But the world is also getting back on the road. People are leaving their homes for work, family and leisure. One sign: Car trade is booming. China more than doubled its exports of automobiles to $2.8 billion, up 129.9%, and ramped up imports 168.1% to $5 billion.
One other sign the pandemic has receded: China’s exports of medical and surgical equipment fell 17.3% year-on-year in May to $1.7 billion.
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