Strong post-pandemic demand for goods continues to drive the growth of China’s exports, although analysts predict that trade growth may slow in the second half of 2021
Chinese exports grew 32.2% year on year in June, exceeding some forecasts by nearly 10%. The increase was driven by strong demand for both materials and consumer goods as many countries around the world, including the UK, ease Covid-19 lockdown measures as they reach adequate levels of vaccination.
The export surge was eclipsed by delays at ports in southern China caused by a series of coronavirus outbreaks in Guangdong province in May and June. Guangzhou alone reported more than 150 locally transmitted cases between May 21 and June 17, although the outbreaks have since been brought under control.
Chinese exports to the UK have exhibited strong performance in 2021, driven by demand for PPE and electronic devices. This is part of a longer-term trend that has made China the UK’s largest single import market. Goods imported from China reached £16.9 billion in Q1 2021.
China’s imports also grew by 36.7% year on year. Imports of soybeans, corn and natural gas all rose, while crude oil imports fell 3%. UK exports to China have also increased in 2021, up 6.2% from 2020 at £3.9 billion in Q1 2021, led by manufactured goods such as machinery and transport equipment.
Import growth was down from 51.1% in May, in line with suggestions that trade may begin to slow down in the second half of the year as retailers rebuild their inventories and consumption patterns normalise. The spread of the highly transmissible Delta variant has also caused uncertainty about how long the global economic recovery in 2021 will continue.