The coronavirus pandemic continues to be an extremely disruptive force in the global economy. As COVID-19 cases increase in the United States, parts of the country have reintroduced lockdowns, and last week’s disappointing employment report raised fears of another possible recession – amplifying calls to Congress to take economic stimulus measures.
But as the virus continues to hamper the economies of the United States and Europe, China has successfully transformed the pandemic into a stronger global trading position. On Monday, it emerged that China’s trade surplus exceeded $ 75 billion in November – a new record that speaks to the country’s recovery from the pandemic and the extent to which other countries depend on Chinese goods.
Chinese exports last month were 21% higher than in November 2019, and exports to the United States rose 46% despite a trade war that resulted in tariffs on hundreds of billions of dollars of Chinese products. China’s global trade surplus in the first 11 months of the year also jumped 21% to $ 460 billion, among the highest figures on record.
On the one hand, the Chinese economy is in the midst of an impressive recovery from an epidemic that hit it before the rest of the world, with GDP growth in the third quarter. reaching almost 5%. But the trade surplus is also a testament to the impact of lockdowns on Western economies, which produce and export less as a result – and rely more on foreign imports.
The United States’ global trade deficit stood at over $ 63 billion in October, the Commerce Department said last week, and on a cumulative basis of 9.5% over the previous year. America’s trade deficit with China also continues to swell despite the Chinese now import more American goods than before. Yet China’s purchases of American products stay well below targets secured by the “phase 1” trade deal between the two sides earlier this year, while the United States imports more Chinese products.
Although China’s current and record export levels are expected to slow as the global economy emerges from the pandemic in 2021, this year has seen the world’s second-largest economy strengthen its position in world trade. Despite the Trump administration’s efforts to turn the trade balance in favor of the United States, China will end 2020 in a better place than its rival – having apparently defeated a virus that continues to plague the Western economy.
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