Shipping containers from China and other Asian countries are being unloaded at the port of Los Angeles while the China-US trade war rages on September 14, 2019 in Long Beach, California. –
Mark Ralston | AFP | Getty Images
The economic recovery in the United States and other rich countries gave China’s exports a strong boost last year, according to new research.
Asia’s share of global exports rose in the third and fourth quarters of last year mainly due to China, while the export share of North American countries did not recover, according to the transport and logistics research company MDS Transmodal.
Much of this inequality is due to the increased demand for Chinese goods from wealthy countries, including the United States.
“The increase in world trade was mainly due to China, which not only retained the title of” Factory of the World “but also improved its position,” said Antonella Teodoro, senior consultant at MDST.
MDST calculated that Chinese exports led the world in the third quarter, up 3.5% year over year. The growth was even greater in the fourth quarter: 14%.
Trade with China is a key concern of global markets. While China bought agricultural exports as it had promised under the Trump administration’s Phase 1 trade deal, the volumes of agreed trade were never reached.
The Biden government is also trying to reset trade ties between the US and China. China critic Katherine Tai will be Biden’s US sales representative. Secretary of State Antony Blinken and National Security Advisor Jake Sullivan will meet with Chinese officials Yang Jiechi and Wang Yi on Thursday in Anchorage, Alaska.
The economic efforts of affluent countries to combat the economic consequences of the Covid-19 pandemic also played a role in export disparities in the second half of the year, Teodoro said.
“The rise was aided by the emergency fiscal and monetary stimuli launched by the rich economies,” said Teodoro, noting that east-west merchant shipping is driving growth. Meanwhile, she added, minor economic stimulus efforts in developing countries are likely to explain much of the overall lower volume of trade.
“The shift in consumer spending from travel, vacation and entertainment events to physical goods purchased primarily online has shaped all major Western economies, particularly North American countries,” added Teodoro.
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Some of these pandemic purchases included bicycles, ATVs and motor exports from China. According to MDST, imports of these items rose about 200% in the third and fourth quarters. Exports of kitchen appliances and electronic machines and devices for the home office rose by 50% over the same period. Fitness equipment also experienced a strong upswing in the past year.
“With consumers confined to their homes for much of 2020 due to coronavirus lockdown procedures, it’s not surprising that the surge in Chinese exports in the final quarter of 2020 was mainly due to fitness equipment, which more than doubled,” said Teodoro.
Based on the trade volume transported by SEKO US, there is a direct correlation with the economic reviews and the increase in e-commerce spending.
Rick Lee, COO of SEKO Logistics in North America, told CNBC that e-commerce orders rose more than 100% after the first wave of stimulus checks. The order volume also increased after the second stimulus check.
“We expect similar consumer behavior with the third round of stimuli,” said Lee.
US exports rejected
The data on the increase in Chinese exports comes from a CNBC analysis which found that in the second half of last year, air carriers rejected agricultural exports worth at least $ 1.3 billion in U.S. ports.
The Federal Maritime Commission is investigating whether freight forwarders have violated U.S. Shipping Law by sending empty containers back to China instead of loading them with U.S. goods. The law prohibits non-discriminatory administrative processing by carriers for the movement of goods on the water.
The freight forwarder’s preference for empty containers depends on economics. The price per container on the China to US route ($ 4,571) is more profitable than on the US to China route ($ 715). Time is also a factor. Agricultural containers must be cleaned between loads.
“North American imports into the Far East increased only slightly in the fourth quarter compared to 2019, with both Japan and South Korea falling,” said Mike Garratt, chairman of MDS Transmodal.
The relocation of the container trade has led some US agricultural exporters to move more of their goods to their Chinese customers in bulk containers. But after strong mass exports in the fall, US soybean exports are falling as China turns to Brazil for its soybean harvest.
However, US corn exports remain very strong.
“While soybean deliveries are weak, US Gulf corn continues to show strength,” said Jesper Buhl of BullPositions, a publication analyzing grain markets.