By Jonathan Cheng
BEIJING--China's exports surged by more than 60% in the first two months of the year from last year's coronavirus-induced lows, as demand in the U.S. and Europe for made-in-China goods continued to rebound.
The year-over-year jump in exports was no surprise to economists, given that China's economy was flattened during the early months of 2020, as authorities locked down Wuhan, the Chinese city where the coronavirus first emerged, and shut down much of the country to contain it.
But the 60.6% jump in the January-February period from a year earlier, released Sunday by the General Administration of Customs in Beijing, significantly outpaced the 40% increase expected by economists polled by The Wall Street Journal. China typically releases data for the first two months of the year together to eliminate distortions from the Lunar New Year holiday, which can fall in January or February.
This year, in February alone, outbound shipments surged 154.9% from a year earlier, a record monthly surge for Chinese exports in year-over-year terms, albeit one made possible only by last February's equally historic plunge in trade.
China's imports, too, rose 22.2% in the first two months of the year compared with last year, accelerating from December's 6.5% year-over-year increase and comfortably topping the 15% growth expected by economists.
Taken together, China's trade surplus in January-February widened from December to $103.25 billion, well above economists' projection of $57.7 billion.
This so-called low base effect is expected to give a lift to China's other major economic data points for the first quarter of the year, which are typically tracked in year-over-year terms.
Those comparisons will become more difficult in the coming months. After a sharp drop in trade in the first two months of 2020, the sector recovered in the spring, and for much of the latter half of the year China's manufacturing and export machine churned out large volumes of medical protective gear and work-from-home electronic products to satiate demand from the rest of the pandemic-hit world.
China's resilient export sector was a key pillar of the overall recovery in the world's second largest economy, which expanded 2.3% last year, making it the only major economy to post growth in 2020.
Even after stripping out the statistical distortions for the first two months of 2021, the trade figures reflected resilient overseas demand as fiscal stimulus measures in the U.S. and Europe boosted spending.
On the supply side, meantime, official pandemic-control measures encouraging Chinese workers to stay at their workplaces rather than return home for the Lunar New Year meant that exporters were able to better meet demand than in years past, China's customs bureau said Sunday.
Stripping out comparisons with last year's Covid-19-impacted figures altogether, the customs bureau said Sunday that China's imports and exports were off to "a flying start" for 2021, noting that January and February's trade figures were roughly 20% higher than the same period in 2018 and 2019, before the initial outbreak.
Despite the optimism signaled by Sunday's trade data, China's policy makers have remained cautious on the outlook for foreign demand, given the uncertainties around vaccinations and virus variants. In its annual government work report, unveiled Friday, Chinese leaders set a relatively modest goal of keeping exports and imports at "stable levels."
For the broader economy this year, China policy makers have set a formal target for gross domestic product to rise by 6% or more, a modest goal that is significantly lower than most economists' projections for growth of 8% or more. Economists say that this easy-to-realize target gives Beijing more wiggle room to rein in debt and address other longer-term structural challenges that could hinder growth.
Part of the longer-term shift by China's policy makers is to orient the economy away from reliance on external demand, in part because of increasing geopolitical strains. In response, Beijing has vowed to boost domestic demand and has stepped up calls for its citizens to spend more.
Grace Zhu contributed to this article.
Write to Jonathan Cheng at jonathan.cheng@wsj.com
(END) Dow Jones Newswires
03-07-21 0117ET
