China’s Trade Tops $6t in 2021, Reflects Global Lead in Economic Rebound, COVID-19 Containment

Digital economy expected to have a bigger role in growth

By GT staff reporters

Jan 14, 2022 08:20 PM

Photo:VCG

China's trade topped $6 trillion for the first time in 2021, customs data showed on Friday, as the economy, a global forerunner in containing the COVID-19, continued a solid recovery over the past year.

The data would be sufficient to crush scaremongers, economists said, defusing concerns over an estimated slower trade growth in 2022 amid a global downturn. They cited well-run digital economy and household income growth expectations that might turn for the better if the pandemic wanes later this year.

The country's foreign trade in US dollar terms stood at $6.05 trillion in 2021, with the reading exceeding the $5 trillion mark before topping $6 trillion in the same year, eight years after the country achieved $4 trillion in foreign trade.

It grew in 2021 by $1.4 trillion, equivalent to the annual foreign trade in 2005, according to customs data.

In yuan terms, China's commodity trade grew by 21.4 percent year-on-year to 39.1 trillion yuan in 2021, with exports up 21.2 percent to 21.73 trillion yuan and imports up 21.5 percent to 17.37 trillion yuan.

The gains came across as even more evident denominated in US dollars, with exports soaring 29.9 percent for the whole of 2021 while import growth standing at 30.1 percent. 

China's trade retained robust resilience in the face of severe fallout from the global coronavirus pandemic, delivering "dazzling" results, Li Kuiwen, spokesperson of the General Administration of Customs (GAC), told a press conference on Friday in Beijing.

The country's foreign trade went off a good start during the 14th Five-Year Plan period (2021-25), Li said.

Private businesses, the backbone of the country's trade juggernaut, booked 19 trillion yuan in trade last year, an increase of 26.7 percent, two percentage points higher than the previous year, comprising 48.6 percent of the country's total, read GAC numbers. 

Foreign-invested firms tallied 14.03 trillion yuan in trade, a rise of 12.7 percent. State firms, for their part, registered a 27.7 percent increase to 5.94 trillion yuan.

The brisk trade growth will be likely trend lower this year alongside an overall downturn, while a resilient economy is still here to stay, observers said.

China's trade landscape faces rising uncertainty, instability and imbalance amid recurrent waves of the pandemic, meaning the country's relevant advantage in taking the lead in economic rebound might be weakening, GAC's Li said. 

He stressed, however, that the country's resilience and strong economic fundamentals over the long run won't change, thereby vigorously underpinning a push to stabilize trade.

If the virus situation was to wane in the US and Europe later this year, global supply chains that have been battered by the pandemic would be on path for a revival. As a consequence, China, having played a central part in filling global supply chain gaps, tends to get fewer orders, Cao Heping, an economist at Peking University, told the Global Times on Friday.

A slowdown in trade growth is in line with a moderation in economic growth. China's economic expansion is expected to range from 5.5 percent to 6.5 percent in 2022, compared to an estimated 8 percent for 2021, according to Cao.

In a sign of a pronounced slowdown across the globe, the World Bank on Tuesday revised down its forecast for the global economy to 4.1 percent in 2022 from 5.5 percent in 2021, citing dissipating pent-up demand.

For those sowing seeds of woes in the Chinese economy, mainly surrounding its property sector, local government debts and income expectations, such scaremongering is essentially ill-grounded, Cao said.  

The government has shown its adeptness in aligning its overhaul of the real estate industry with the economy's actualities, he added, arguing against claims that local government debt woes grow too big to impede local government investment.

China's local government debt levels are much lower than that in the West and are far from alarming levels, the economist stressed, adding that the waning of the pandemic globally could be a shot in the arm for local households' spending, and would also boost domestic consumption.

China's exports growth would slow to 10 percent, but still make a positive contribution to GDP growth in 2022, Wang Tao, chief China economist at UBS, wrote in a note sent to the Global Times, adding that COVID-19 restrictions are likely to ease markedly from the second quarter onwards, "spurring domestic consumption recovery, especially in services."

More fiscal support and a small rise in macro leverage are estimated in the pipeline, boosting infrastructure investment growth, read the note.

On top of that, as Cao put it, the country's digital economy is on pace for a bigger role in propping up the economy and its trade juggernaut, offsetting the headwinds confronting the traditional part of the economy.

In a sign of China's trade prowess in the digital era, its e-commerce trade, according to Friday's data, gained 15 percent to 1.98 trillion yuan, with exports up 24.5 percent to 1.44 trillion yuan.