According to the trade data released by the General Administration of Customs of the People’s Republic of China (GACC), China’s export of mechanical and electrical products totaled $899.07 billion during the first half of this year, 40.2 percent higher than a year prior (expanded by 31.8 percent compared to the same period in 2019), and the year-on-year growth rate exceeded 1.6 percentage points over the national total export in goods. The value of import totaled $541.72 billion, 30.7 percent higher than a year prior (expanded by 27.9 percent compared to the same period in 2019), and the year-on-year growth rate was 5.3 percentage points lower than that of national total import in goods. The trade balance of mechanical and electrical products was $357.34 billion in surplus, much higher than the total surplus in goods ($251.52 billion).
In the second quarter of 2021, China’s export in mechanical and electrical products grew by 29.5 percent to $470.9 billion compared with a year earlier, and posted 31.4 percent growth from the pre-epidemic level in 2019. In June alone, China’s export in mechanical and electrical products reached $162.8 billion, up by 31.6 percent from a year earlier, and marks an increase of 33.3 percent from the pre-epidemic level in 2019, realizing double-digit positive year-on-year growth for twelve consecutive months since July 2020, and eight consecutive months with year-on-year added value of more than $30 billion since November 2020.
In the first half of 2021, the year-on-year growth rate of export value of the major commodities of mechanical and electrical products were double-digit generally, and the rate of motor vehicles was of three digits. The aggregate exports of automatic data processing machines and parts thereof, mobile phones, and electronic integrated circuits drove the growth rate of mechanical and electrical products by 8.8 percentage points.
Additionally, the United States, Hong Kong, Japan, South Korea and Vietnam ranked the top five in China’s export market with the proportion of 17.37 percent, 14.06 percent, 4.87 percent, 4.15 percent and 4.14 percent respectively, and the year-on-year growth rates of China’s export value with the five partners correspondingly stood at 45.3 percent, 40 percent, 22.8 percent, 27.6 percent and 40.6 percent.
In the second quarter of 2021, China’s import in mechanical and electrical products reached $285.1 billion, grew by 30.2 percent compared with a year prior (up by 29 percent over the same period in 2019). In June, the import increased 28.6 percent year on year to $99.9 billion, and up by 38.3 percent over the same period in 2019, realizing the year-on-year added value of more than $90 billion for four months and the double-digit growth rate for ten months in a row. Besides, the top three import partners were Chinese Taiwan, Japan and South Korea, with the proportion of 18.32 percent, 12.64 percent and 12.47 percent respectively.
In the first half of 2021, China’s import value of electronic integrated circuits increased 28.3 percent to $197.9 billion based last year, and the year-on-year growth rate has been being over 20 percent for the last seven consecutive months, driving the import growth rate of mechanical and electrical products by 10.5 percentage points. Electronic integrated circuits remain to be China’s single commodity with the largest import volume, accounting for 36.5 percent and 15.6 percent of the exported mechanical and electrical products and total goods, respectively.
Although Covid-19 pandemic is continuing to spread across the world, China’s electromechanical industry still shows resilience and vitality thanks to its advantages of capacity and efficiency. While manufacturers have been worrying about the rising cost of raw materials and international freight together with the floating exchange rate, the international demand for major mechanical and electrical commodities, including computers, mobile phones, semiconductors, motor vehicles, household appliances and photovoltaics are growing, and the sustained recovery of global manufacturing would boost the prospect of foreign trade of mechanical and electrical products. We expect that the year-on-year growth rate of import and export value of China’s electrical and mechanical products could be double-digit.
On July 13, Mr. Li Kuiwen, the spokesperson and director of the Department of Statistics and Analysis of the General Administration of Customs, introduced that in the first half of this year, China’s total foreign trade expanded 27.1% year on year to 18.07 trillion yuan, which continued its stable and sound performance and registered a historical high. Exports grew by 28.1% to 9.85 trillion yuan, while imports increased by 25.9% to 8.22 trillion yuan. Compared with the same period in 2019, foreign trade, exports and imports increased by 22.8%, 23.8%, and 21.7% respectively.
In terms of the main drivers of China’s continuous growth in foreign trade, Mr. Li Kuiwen demonstrated several reasons as following:
First, thanks to the stable and growing domestic economy, the vitality of market entities has been stimulated, which provided strong support for the steady growth of foreign trade. The first half of the year, the Chinese economy steadily recovered; major economic indicators, including industrial added value, fixed asset investment, and total retail sales of consumer goods improved continuously; and production and demand continued to rebound. This has laid a solid foundation for the steady growth of foreign trade. In particular, relying on China’s policies to ensure steady growth in foreign trade, the number of platforms of high-level opening up increased rapidly, and the advantages of new trade forms and models became more prominent.
Second, the sustained recovery of the global economy has boosted external demand. The first half of the year, several international organizations upgraded their forecasts for this year’s global economic growth. For example, in April, the International Monetary Fund (IMF) raised its global growth forecast for 2021 to 6%. In June, the World Bank raised its estimate to 5.6%. The global economic recovery has boosted international trade and China’s exports.
In addition, last year’s lower base and price factors also, to some extent, helped drive the growth of foreign trade.
As for China’s foreign trade outlook in the second half of the year, Mr. Li Kuiwen indicated that in general, as COVID-19 keeps wreaking havoc in many parts of the world, China’s foreign trade still faces uncertainties in a complex global epidemic environment. In the second half of last year, China’s total imports and exports grew 27% compared with the first half of last year. With a higher base, the growth rate of China’s foreign trade may slow down in the second half of this year. However, imports and exports are still expected to maintain relatively rapid growth throughout the year.
Please refer to the link below for the latest policy paper:
• 2021 General Office of the State Council: New forms, models of foreign trade to gain momentum
• 2021 National Development and Reform Commission: The National “14Th Five Year Plan” Of Circular Economy Development Was Issued, Involving Textile Printing And Dyeing