China's foreign trade rises 3.4% in 2019

China's foreign trade rose by 3.4 percent year on year to total 31.54 trillion yuan (US$4.58 trillion) in 2019, according to data from the state's customs.

Exports added up to 17.23 trillion yuan, an increase of 5 percent from 2018, while imports rose by 1.6 percent to 14.31 trillion yuan, expanding the overall trade surplus by 25.3 percent to 2.92 trillion yuan, the General Administration of Customs said on Tuesday.

Zou Zhiwu, the administration’s deputy director, said the development of China's foreign trade last year had been generally stable with gradually enhanced quality.

Exports and imports had continuously posted growth quarter by quarter, Zou said.

Headline foreign trade data in the four quarters was 7.03 trillion yuan, 7.68 trillion yuan, 8.26 trillion yuan and 8.56 trillion yuan respectively.

As for December, China saw foreign trade surge by 12.7 percent year on year to 3.01 trillion yuan, of which exports rose 9 percent to 1.67 trillion yuan, while imports were up by 17.7 percent to 1.34 trillion yuan. All three figures were a record for a single month.

"The big rise in year-over-year export growth in December was mainly due to three factors — a low base in December 2018 as a result of front-loading; the recent de-escalation of the US-China trade war; and a moderate recovery of the global economy," said Lu Ting, chief China economist at Nomura.

The European Union remained China's largest trading partner at 4.86 trillion yuan in 2019, up 8 percent. Trade with the Association of Southeast Asian Nations was 4.43 trillion yuan, an increase of 14.1 percent, making ASEAN China’s second-largest trading partner last year. Trade with the United States, however, posted a decline, with its value down 10.7 percent to 3.73 trillion yuan over the year.

China Customs also noted that foreign trade with countries along the Belt and Road had soared to 9.27 trillion yuan, an increase of 10.8 percent which was 7.4 percentage points faster than the overall growth pace.

Private enterprises posted rapid growth in trade, contributing a total of 13.48 trillion yuan to China's exports and imports, up 11.4 percent, accounting for 42.7 percent of the total foreign trade value which was 3.1 percentage points higher than in 2018. It was the first year that the private sector had surpassed foreign-invested companies to become the biggest contributor to the state's foreign trade.

Among them, exports totaled 8.9 trillion yuan, up 13 percent, while imports grew 8.4 percent to 4.58 trillion yuan.

Meanwhile, foreign-invested enterprises posted foreign trade at 12.57 trillion yuan to make up 39.9 percent of the total, while imports and exports of state-owned enterprises added up to 5.32 trillion yuan, contributing 16.9 percent of the headline figure.

Zou emphasized that the structure of trade patterns had been further optimized, with general trade expanding to 18.61 trillion yuan in 2019, accounting for 59 percent of total foreign trade which was an 1.2 percentage points increase compared with 2018. Processing trade, meanwhile, fell 5.1 percent to total 7.94 trillion yuan, accounting for 25.2 percent.

Imports of commodities such as iron ore, crude oil, natural gas and soybean posted increases of 0.5 percent, 9.5 percent, 6.9 percent, and 0.4 percent respectively in volume. Imports of pork and beef also surged 75 percent and 59.7 percent.

"China’s commodity import figures for December were strong, mirroring the recent up-tick in industrial activities and restocking. Annual imports for the year were reasonably robust despite trade tensions and slowing economic growth concerns," said Daniel Hynes, senior commodity strategist at the Australia and New Zealand Banking Group.

"We expect imports to remain well supported ahead of the Chinese New Year shutdown," Hynes said.