November has become the most lucrative month for China’s exports, driven by strong demand for pandemic-related items such as electronics and protective gear.

China shipped $268 billion worth of goods last month, posting a 21 percent growth year-on-year, customs data showed on Monday. This was the highest monthly sum ever for the country’s exports and the highest growth rate since February 2018. 

“China’s export performance once again beat the market expectations, mainly due to the holiday demand surge from the developed markets. Consumer income and spending are supported sufficiently by furlough schemes in the US and Western Europe,” Wang Dan, chief economist at Hang Seng Bank (China), told Chinese state-run media CGTN.

Inbound shipments rose for the third consecutive month to reach $192.6 billion in November, although at slightly slower pace than the month before. Imports rose by 4.5 percent in November from a year earlier, compared to a 4.7 percent growth in October, and were below the six percent expected by analysts. 

Slower imports growth and the export boom only widened China’s trade surplus that amounted to $75.4 billion last month. The gap between exports and imports was the largest on record in Refinitiv data going back to 1981, according to Reuters. 

The widening trade surplus could reflect disproportionate recovery between industry and domestic consumption in the world’s second largest economy. 

This could also create hurdles for the China-US trade deal, as the US trade deficit with China has widened to $37.4 billion to reach a new monthly high in November. Last month, the US became the top market for Chinese goods, and it was China’s third largest trading partner for 11 months this year.

“China-US trade surplus continued to grow, exerting additional pressure on yuan valuation. We now expect the end-year RMB exchange rate to breach 6.5, which will put significant pressure on the export sector,” Wang told CGTN.

Some analysts still caution that booming exports are temporary as they are mainly driven by growing shipments of pandemic-related goods as well as seasonal holiday demand. Exports of electronics in November jumped 25 percent compared to the same period last year, while medical equipment exports soared 38 percent. At the same time, many countries are still struggling to cope with the rising number of coronavirus infections and are forced to impose restrictions, and that could add pressure on their purchases from China.

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