China’s dominance as a trading power looked undented in March as both exports and imports surged from low levels a year earlier, signs that the global recovery from the Covid-19 pandemic is solid for now.
Exporters continued their recent record-beating performance, selling $241 billion worth of goods overseas last month, according to government figures released Tuesday in Beijing. The $710 billion in exports in the first quarter was China’s second-highest total ever, just shy of the record in the final three months of last year.
Chinese factories are among the top beneficiaries of soaring global demand for medical goods, work-from-home equipment and other home merchandise that travel-starved consumers are buying during the pandemic.
Total shipments abroad jumped almost 31% in March from a year earlier, with broad, double-digit gains across major trading partners, including a 53% surge to the U.S. and a 46% increase to the European Union.
But David Qu of Bloomberg Economics said there are reasons to question whether such strength of overseas demand is sustainable. Details in the report “reveal emerging weakness in what’s been a mainstay during the Covid crisis — exports of stay-at-home related products,” he writes, pointing out that sales abroad of those items weakened compared with the fourth quarter of 2020.
“This segment was a major driver of China’s strong exports” in the second half of last year, he says.
Rising factory prices in China also likely played a part in boosting the value of exports. Those inflation pressures are also raising the cost of foreign purchases, with higher commodity prices pushing the value of China’s imports in March to a record and another signs of its solid recovery from last year’s pandemic.
Data due Friday will probably show the world’s second-largest economy expanded a record 18.5% in the first quarter from a year ago.
—James Mayger in Beijing
The post-Brexit slump in U.K. merchandise trade with the European Union partially recovered in February on improved exports of cars and pharmaceuticals, according to official figures. British goods exports to the EU rebounded almost 47% in February from a month earlier, while imports from the bloc increased 7.3%, data from the Office for National Statistics showed on Tuesday. Separately, U.K. sportswear chain JD Sports Fashion said it’s opening new warehouses in the EU to avoid the hassles of customs checks.
Today’s Must Reads
- On track | Canadian Pacific Railway in March agreed to acquire Kansas City Southern for about $29 billion including debt. If completed, the merger would be the largest between two major North American railroads and the first successful one since the 1990s.
- Chips summit | President Joe Biden told companies vying with each other for a sharply constrained global supply of semiconductors that he has bipartisan support for government funding to address a shortage that has idled automakers worldwide.
- Currency watch | Treasury Secretary Janet Yellen will decline to name China as a currency manipulator in her first semiannual foreign-exchange report, according to people familiar with the matter, a move that allows the U.S. to sidestep a fresh clash with Beijing.
- Swamped in Singapore | One of Asia’s busiest ports is preparing for an influx of ships after a week-long blockage at the Suez Canal. Logjams and delays are expected to worsen in Singapore, which already has ships waiting in queue.
- Ever discussing | Egypt is still in talks about compensation stemming from the operations to free the giant container ship whose stranding in the Suez Canal for nearly a week roiled global cargo markets.
- Cruise control | Cruise, the self-driving car unit backed and majority owned by General Motors, signed a deal with Dubai’s Roads and Transit Authority to begin operating self-driving taxis in the city in 2023.
- Record order | Denmark’s national railroad operator, DSB, has given Alstom SA a contract worth as much as 20 billion kroner ($3.2 billion) for the delivery of electric trains, the biggest order it has placed to date.
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On the Bloomberg Terminal
- Downsizing crunch | Hong Kong’s major commercial landlords could be in for several years of falling office property revenue on a mix of shrinking demand from banks, and a 2022 supply boom that could add 5% or more to existing stock, Bloomberg Intelligence writes.
- Picking up | North American rail traffic rose 5.2% in in the first quarter from a year earlier, AAR data show, and robust intermodal growth (up 12.5%) appears poised to persist after offsetting impacts from industrial economy weakness, severe weather and auto supply-chain shortages in the quarter, Bloomberg Intelligence says.
- Use the AHOY function to track global commodities trade flows.
- Click HERE for automated stories about supply chains.
- See BNEF for BloombergNEF’s analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.
- Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.
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