China Trade Surplus Records New High in October

However, it is under pressure due to a broad depreciation among major currencies against the greenback, which is occurring amid a global central bank push back against expectations of earlier interest rate hikes. The offshore yuan held firm around 6.3970 per US dollar on Friday, and it is expected to finish the week flat.

In the medium term, analysts anticipate the yuan to gain strength as Chinese enterprises use more of the local currency as the year draws to a close for a variety of payments, analysts say. A moderate dollar rise versus major currencies, including the yuan, is expected in the medium to long term, as a result of expectations that the Fed will declare its intention to raise interest rates definitively.

Compared with market estimates of a 25.0 percent increase and after a 17.6 percent increase in September, imports into China increased by 20.6 percent year on year to USD 215.68 billion in October 2021. Purchases of coal increased by 96.2 percent and natural gas by 24.6 percent, but purchases of crude oil (down 11.2 percent), unwrought copper (down 33.6 percent), and soybeans were down significantly (-41.2 percent).

Visitors from Japan (9.9 percent), South Korea (22.3 percent), Taiwan (7.2 percent), Australia (24.3 percent), the United States (4.6 percent), and the ASEAN nations (23.1 percent) boosted arrivals, while those from the European Union (EU) decreased marginally (-0.7 percent).

From USD 57.32 billion in the same month the previous year, China’s trade surplus soared to USD 84.54 billion in October 2021, considerably above market expectations of USD 65.55 billion. Exports expanded by 27.1 percent year on year to USD 300.22 billion, marking the 13th consecutive month of double-digit growth; imports grew by a weaker 20.6 percent to USD 215.68 billion, marking the 13th consecutive month of negative growth.

When the first ten months of the year are taken into account, the trade surplus increased to USD 513.74 billion from USD 373.92 billion in the same period of the previous year. Meanwhile, the trade surplus with the United States shrank to USD 40.75 billion in October from USD 42.0 billion the previous month.

From January through October of this year, China has a USD 320.67 billion trade surplus with the United States of America. Exports from China increased by 27.1 percent year on year to USD 300.22 billion in October 2021, after a 28.1 percent increase in September and contrasted to market estimates of a 24.5 percent increase in October 2021.

With exports of rare earths increasing by 89 percent, this was the 13th consecutive month of double-digit increase, driven by strong worldwide demand ahead of the Christmas season and improving power constraints.

Increased sales came from Japan (16.3 percent), South Korea (33.1 percent), Taiwan (24.0 percent), Australia (22.3 percent), the United States (22.7 percent), the ASEAN nations (18.0 percent), and the European Union (EU) (44.3 percent). Exports reached USD 2.7 trillion in the first 10 months of the year, up 32.3 percent over the same period the previous year and already exceeding the total for the whole year 2020.

In October 2021, foreign exchange reserves in China increased by a fraction of a percentage point to USD 3.218 trillion from USD 3.201 trillion in September, marking the first increase since July and exceeding market expectations of USD 3.197 trillion, as the dollar fell against a basket of other major currencies. In the meanwhile, the value of gold reserves climbed to USD 110.83 billion from USD 109.18 billion, representing a 3% rise over the previous year.