Modern China dominates world trade following major economic reforms introduced in 1978 that were more focused on market-oriented economic development.
While the country’s economy ranks second in the world after the United States, China has been the world’s biggest exporter of goods and commodities since 2009. In the last ten years, the trend has been a bullish one, as you can see from the graph below.
China also ranks second in total imports, the number 71 economy in terms of GDP per capita, and the number 29 most complex economy according to the Economic Complexity Index (ECI).
Not to mention China accounts for a substantial chunk of the global trade in natural resources such as aluminum, coal, copper, and iron ore.
In this post (plus infographic), let’s take a look at China’s major exports and imports, the top destinations for both, along with China’s current state of exports and imports during the still raging COVID-19 pandemic.
China’s Reigning Export Dominance
According to Statista, China overtook the United States as the world’s largest trading nation in 2013, when China’s export value of goods hit a record high of roughly $2 trillion. The International Monetary Fund (IMF) suggests that China’s total GDP had surged over $9 trillion that year.
And so, exports of goods accounted for over 24% of China’s total economic output in 2013. Meanwhile, China’s trade surplus amounted to $259 billion and hit a record high of $594 billion in 2015.
It’s since the implementation of various economic reform strategies in 1979 that China’s economic development has hugely benefited from its export-led growth strategy. Over the past few years, China has steadily climbed the global value chain by increasing the export share of high technology products such as computers and power devices.
Talking about the past couple of years, from October 2019 to October 2020, Chinese exports grew by $18.3 billion — standing at $192 billion in October 2020. Below are China’s top export destinations and products.
China’s Top Export Destinations
For the most part, China exports to:
- United States – $429 billion
- Hong Kong – $268 billion
- Japan – $152 billion
- South Korea – $108 billion
- Germany – $96.9 billion
China’s Top 10 Exported Products
The top exports of China are:
- Broadcasting Equipment – $208 billion
- Computers – $141 billion
- Integrated Circuits – $108 billion
- Office Machine Parts – $82.7 billion
- Telephones – $54.8 billion
- Refined petroleum – $31.2 billion
- Cotton – $13.7 billion
- Plywood – $4.79 billion
- Petroleum gas – $1.95 billion
- Tea – $1.67 billion
China’s Reigning Import Dominance
Coming to China’s imports, the goods import trade value in 2019 exceeded $2 trillion, which accounted for roughly 14% of the global imports, making China the second-largest importing nation in the world.
Among the country’s major import products are machines and electronics such as integrated circuits, mineral products (crude oil, iron ore, etc.), vehicles and their parts, metallurgical products, chemicals, rubber, plastic in primary forms, and textile.
In the last few years, China’s agricultural sector has also been increasingly relying on imports, with the country being the world’s largest importer of soybeans and meat and among the leading importers of dairy, wine, and other food products and beverages.
China’s major import partners are the ASEAN countries, the EU, South Korea, Taiwan, and Japan. Imports from the United States, while still amounting to more than $100 billion annually, have been declining since 2017 owing to the ongoing trade war and import tariffs between the two nations.
Despite the upward trend in China’s imports, however, the country’s exports exceed its imports by a big margin, creating the largest merchandise trade surplus in the world. In 2019, China had a positive trade balance exceeding $420 billion.
From October 2019 to October 2020, Chinese imports grew by $12 billion — standing at $172 billion in October 2020. Below are China’s top import destinations and products.
China’s Top Import Destinations
For the most part, China imports from:
- South Korea – $136 billion
- Japan – $128 billion
- Australia – $111 billion
- Germany – $107 billion
- United States – $103 billion
China’s Top 10 Imported Products
The top imports of China are:
- Crude Petroleum – $204 billion
- Integrated Circuits – $123 billion
- Iron Ore – $83.1 billion
- Petroleum Gas – $47.8 billion
- Cars – $43.1 billion
- Gold – $36.9 billion
- Soybeans – $33.8 billion
- Copper ore – $31.7 billion
- Vehicle parts – $28.5 billion
- Planes, helicopters, and/or spacecraft – $28.3 billion
Made in China: The 2021 State of Exports & Imports
The panelists at FocusEconomics forecast Chinese GDP at $20.6 trillion, or roughly 81% of U.S. GDP, in 2024. China’s strong handling of the COVID-19 crisis has supported domestic activity and the value of the yuan: both factors will boost the size of the Chinese economy in USD terms over the forecast horizon.
Moreover, strong private consumption will be a key growth driver in the coming years, with the government putting a particular focus on strengthening domestic activity as part of its “dual circulation” strategy that’s meant to cut China’s dependence on overseas markets and technology in the long run. However, the U.S.-China trade tensions and elevated debt levels pose risks.
The first two months are usually volatile for China’s economic activity due to the week-long Lunar New Year holiday, which fell in February this year. The figures are even more distorted in 2021 in comparison with 2020 when factories and businesses were shut to contain the COVID-19 pandemic in the early part of the year.
Exports continued to benefit from rising global demand for medical equipment and work-from-home equipment, which has bolstered China’s V-shaped recovery from the pandemic since the second half of 2020. Furthermore, exports improved thanks to a shorter-than-usual vacation for migrant workers during this year’s Lunar New Year break (don’t forget travel restrictions) and the early resumption of factory production.
Now, here’s the current state of Chinese exports amid soaring global demand and improving manufacturing activity in the US and the EU on the trail of the COVID-19 pandemic.
- As per GACC, exports from China surged 60.6% year-on-year to $468.87 billion in January-February 2021 combined — far above market estimates of a 38.9% rise and accelerating from an 18.1% growth in December 2020.
- Exports of refined oil rose by 1.9% from a year earlier to 10.96 million tons, while those of steel jumped 29.9% to 10.14 million tons.
- In Feb 2021 alone, Chinese exports amounted to around $204.9 billion — a nearly 155% increase in exports compared to the same period of the previous year.
And here is the present state of Chinese imports:
- Imports rose by 22.2% from last year’s level to reach nearly $364 billion — with huge increases in purchases of steel and natural gas in the two-month period and a plunge in coal.
- The import volumes of integrated circuits, iron ore, and crude oil increased by 36%, 2.8%, and 4.1% respectively during the first two months.
- Chinese exporters are expressing bullish views on the prospect of exports in the next two to three months, but at the same time warned that uncertainty remains for foreign trade given the pandemic situation.
ASEAN was China’s largest trading partner in the first two months of this year, with China’s trade with ASEAN members up 32.9% to hit 786 billion yuan, accounting for 14.4% of China’s overall trade in the two months.
Also, China-US trade got off to a good start in 2021, with bilateral trade rising 69.6% to 716.4 billion yuan in the period. The US is now China’s third-biggest trading partner after ASEAN and the EU.
“In the longer term though, we see uncertainty for exports in the second half of the year as external demand for working-from-home and anti-epidemic goods may start to slow, alongside the pandemic staying in check. In addition, more export economies would return to the market, potentially leading to more intensive competition in global markets.”‒ David Qu, Economist at Bloomberg Economics, China Region
Without a doubt, China plays a key role in the world economy, and tracking its trade pattern is important for businesses around the world that rely on Chinese suppliers.
If you’re an aspiring entrepreneur looking for reliable Chinese suppliers, or need help with background verification and company inspection of potential Chinese vendors, feel free to get in touch with us. We support overseas businesses by verifying Chinese companies, facilitating the due diligence that any enterprise should conduct when hunting a business partner in China.
Also, here is the complete infographic that visually packs all this information together in an easy-to-consume format. So if you found this post useful and interesting, go ahead and share the infographic below with your friends and colleagues on social media!