The coronavirus pandemic continues to be a hugely disruptive force in the global economy. As COVID-19 cases surge in the U.S., parts of the country have reintroduced lockdown measures, and last week’s disappointing jobs report has raised fears of another possible recession—amplifying calls for Congress to take action on economic stimulus.
But while the virus continues to hamper the economies of both the U.S. and Europe, China has managed to parlay the pandemic into a stronger global trade position. On Monday, it emerged that China’s trade surplus soared past $75 billion in November—a new record that speaks to the country’s recovery from the pandemic, and the extent to which other countries are relying on Chinese goods.
Chinese exports last month were 21% higher than in November 2019, and exports to the U.S. were up 46% despite a trade war that has resulted in tariffs on hundreds of billions of dollars in Chinese goods. China’s global trade surplus through the first 11 months of the year also surged 21% to $460 billion, among the highest figures on record.
On the one hand, China’s economy is in the midst of an impressive recovery from an outbreak that struck it before the rest of the world, with third-quarter GDP growth coming in at nearly 5%. But the trade surplus also speaks to the impact of lockdowns on Western economies, which are producing and exporting less as a result—and relying more on foreign imports.
The U.S.’s own global trade deficit stood at more than $63 billion in October, the Commerce Department said last week, and on a year-to-date basis was up 9.5% from the previous year. America’s trade deficit with China also continues to swell despite the Chinese now importing more American goods than before. Still, China’s purchases of U.S. products remain well below targets set by the “Phase 1” trade agreement between the two sides earlier this year, while the U.S. is importing more Chinese goods.
Though China’s current, record-setting levels of exports are expected to moderate as the global economy emerges from the pandemic in 2021, this year has seen the world’s second-largest economy strengthen its position from a global trade perspective. Despite the Trump administration’s efforts to redress the balance of trade in the U.S.’s favor, China will end 2020 in a better place than its rival—having apparently overcome a virus that continues to plague the West’s economy.