China's foreign trade surplus jumps in December as imports slump
China's foreign trade surplus surged at the end of 2021, but only as a result of the drag on imports from weakness in the country's property sector.
The Asian giant's trade surplus reached a record $94.5bn in December, as import growth slowed in year-on-year terms, from 31.7% for November to 19.5% last month (consensus: 27.8%).
Export growth on the other hand held up, coming in at 20.9% for December, versus November's rise of 22.0%.
Commenting on the December trade figures, Craig Botham, China+ economist at Pantheon Macroeconomics, said weaker domestic demanda was the main culprit behind the slowdown in imports and not congested shipping lanes or other supply constraints.
Some of the weakness in imports could be linked to the commodities space, he said, partly due to the end of China's energy crisis and hence lower demand for imported coal.
However, in his opinion, the main driver of the weakness in commodity demand was the slowdown in the property sector and therefore investment.
"The deceleration was also fairly widespread across trade partners, both in [year-on-year] and [month-on-mongth] terms, suggesting a spillover of weak demand into non-commodity sectors," Botham added.
"We think the hit to activity from Covid outbreaks is worse than the PMIs had suggested."
Yet there were also positive signs in the data as regards the outlook, with the quarterly and annualised rate of growth for exports to Japan, the European Union and ASEAN still on the rise.
For 2021 as a whole, China's foreign trade surplus reached a record $676.43bn, which was up from $523.99bn in 2020.