Driven by robust demand due to the rapid recovery in major economies, China’s exports are expected to rebound sharply in the first quarter of 2021 to reach a growth of about 30 percent year-on-year and lift GDP growth to 18 percent in the quarter, according to analysts.
“Manufacturing purchasing managers’ index levels in major economies further improved in March, showing that overseas economic recoveries are speeding up and supporting China’s exports,” Lian Ping, head of Zhixin Investment Research Institute, told the Global Times on Monday.
China is scheduled to release trade data on Tuesday and GDP data on Friday.
Due to a high base effect, March export growth is expected to slow from the first two months to 40 percent in US dollar-denominated terms, Lian estimated, noting that the figure for the first quarter will remain strong at 30 percent.
Imports probably grew by a comparatively rapid rate of 25 percent in March due to vigorous domestic demand and high international commodity prices, sending the quarter’s growth figure to 20 percent, Lian said.
However, analysts noted that the recovery of overseas factories, along with high global commodity prices and the lagging effect of yuan appreciation, will weigh on China’s exports, which may be volatile in the short term.
A trade analyst who preferred to be unidentified said that the country’s foreign trade may be characterized by faster growth in the first half of the year and slower expansion in the second half, with an annual average of about 10 percent.
With the easing of the global pandemic and broad-based vaccinations, global demand for medical supplies and stay-at-home products will drop, while the recovery of other emerging economies’ supply capacity will also squeeze China’s exports, he said.
As some countries increasingly politicize trade – with their smear against Xinjiang cotton the latest example – they may find fault with other Chinese goods, the expert said, warning of the long-term potential impact on China’s exports as a whole.
Despite growing pressure on foreign trade, Lian said that the Chinese economy, which is mainly driven by domestic consumption, is expected to grow about 18 percent year-on-year in the first quarter compared with a 6.5 percent growth in the previous quarter.
“Along with a continued economic recovery and quarterly restoration of base figures, China’s GDP growth will slow quarter by quarter this year, but double-digit growth is still probable in the second quarter,” he added.
A cargo ship unloads goods at a port in Nantong, East China’s Jiangsu Province on Monday. In the first quarter, container throughout at the port grew 51.9 percent year-on-year to 115,500 standard containers, and foreign trade container throughout soared 136.1 percent. Photo: CNSphoto
