BEIJING / NEW YORK – China’s imports grew the fastest in value in more than 10 years in April, driven by the country’s economic recovery from the pandemic and rising global commodity prices.
Imports in US dollars rose 43% year over year, the General Customs Administration said on Friday.
“The early 2020 recession skewed year-to-year comparisons,” said David Dollar, senior fellow at the Brookings Institution. Compared to 2019, total imports increased by “healthy but not exceptional” 24% through April, he emphasized.
“I take the price increases as a positive sign that the global economy is recovering well, albeit unevenly,” said Dollar, who characterized the new figures as an expression of China’s “solid growth”.
However, as imports of natural resources and food become more expensive, there are concerns that they could affect corporate profits and consumer spending.
The rise in commodity prices was a key factor behind the April jump. West Texas Intermediate’s crude oil futures are now trading around $ 65 a barrel, more than double what it was a year ago. The value of Chinese crude oil imports rose by around 70% year-on-year in April, while the volume remained largely unchanged.
Imports in the “iron ores and concentrates” category and soybeans increased in value by 90% and 50% respectively, although they increased by only 3% and 11% in volume. Soybeans were a central theme in the negotiations for the “Phase 1” trade agreement signed by China and the US in 2020. China Imports approx. 60% from its iron ore from Australia.
According to the country of origin, the import values from Australia and the USA – both major raw material exporters – rose by around 50%.
“The percentage increase in US imports continues to outperform global imports, partly due to rising commodity prices, but it also indicates that China is continuing to implement its purchase commitments under the US-China phase 1 deal,” said Wendy Cutler, a former US trade officer who is now the vice president of the Asia Society Policy Institute.
Sino-Australian trade relations have deteriorated rapidly in recent months, and China this week announced the end of its economic dialogue. Beijing put pressure on Canberra on political issues, including supporting the latter for an independent investigation into the origins of COVID-19 by imposing high tariffs on Australian exports such as barley.
However, thanks to the country’s high demand, China’s iron tariffs have so far been spared iron tariffs, and rising commodity prices have eased economic pressures on Australia.
As the Chinese economy recovers from a coronavirus-induced cold, purchases of manufacturing equipment and components overseas have also increased. Integrated circuit imports increased by more than 20% in both value and volume. Although the US has essentially banned the supply of cutting-edge chips to Huawei Technologies, many industry watchers say China has snapped up other semiconductors.
Chinese imports of machine tools increased by 28%.
Imports in the “automobiles and chassis” category have more than tripled, while imports of cosmetics and toiletries have increased by around 30%. The surge in consumer goods is partly due to affluent consumers unable to travel due to COVID-19 restrictions.
April was the largest monthly increase in the Chinese import value since January 2011 compared to the previous year. The country’s gross domestic product grew in double digits at this point, thanks largely to 4 trillion yuan (currently 618 billion US dollars). Stimulus package launched in response to the global financial crisis in 2008.
However, the most recent boom does not fully match that of 2011. The nominal per capita disposable income in Chinese cities rose by 3.5% in 2020 – well below the 14% recorded in 2011. Even the prepandemic of less than 8% decreased significantly shortly before 2011.
Consumers and downstream businesses could suffer if businesses choose to pass on rising import costs. Companies that target households and not corporate customers in particular suffer from this.
China’s exports rose 32% year over year in US dollar terms in April, causing the trade surplus to decline 5%.