China's exports rose at the fastest pace in almost three years in November, as strong global demand for goods needed to ride out the pandemic landed the world's second-largest economy a record trade surplus.
A brisk factory recovery in China from coronavirus shutdowns earlier this year has far outpaced reopenings seen in major trading partners, many of which are still struggling with outbreaks.
Exports in November rose 21.1% from a year earlier, customs data showed on Monday, the fastest growth since February 2018. It also soundly beat analysts' expectations for a 12.0% increase and quickened from an 11.4% increase in October.
The strong exports come despite the yuan hovering near multi-year peaks against the dollar, which would be welcome news for policymakers concerned about the impact of a weakening greenback on China's trade competitiveness.
Imports rose 4.5% year-on-year in November, slower than October's 4.7% growth, and underperforming expectations in a Reuters poll for a 6.1% increase, but still marking a third straight month of expansion.
Analysts say improving domestic demand and higher commodity prices helped buoy the reading.
"We believe China's export growth could remain elevated for another several months due to the worsening COVID-19 situation overseas," the note said.
However, they noted some signs that demand for these pandemic-related goods was losing momentum.
The firm shipments led to a trade surplus for November of $75.42 billion, the largest since at least 1981 when Refinitiv records began. It was also wider than the poll's forecast for a $53.5 billion surplus.
China's exports were supported by strong overseas demand for personal protective equipment (PPE) and electronics products for working from home, as well as seasonal Christmas demand, Nomura analysts said in a note.
Booming sales of fridges, toasters and microwaves to households across the locked-down world have helped propel China's manufacturing engine back to life, super-charging demand for key metals like steel, copper and aluminium, after a sharp slump early in the year.
In another sign of buoyant trade, China's export surge and the low turnaround rate of containers from abroad have triggered a recent shortage of containers domestically, state media China Daily reported.
A spate of early indicators showed China's economic recovery from the coronavirus pandemic has stepped up, with manufacturing surveys showing new export orders expanding at a faster pace for November.
That comes despite a sharp appreciation in the yuan in recent months, which some fear could hit exporters. Some firms reported that a strong yuan squeezed profits and reduced export orders in November, the statistics bureau said this week.
The yuan has booked six straight months of gains, its longest such winning streak since late 2014, and is trading at 2-1/2 year highs.
The strong exports widened China's trade surplus with the United States to $37.42 billion in November from $31.37 billion in October.
Chinese buyers nevertheless stepped up purchases of U.S. farm produce including soybeans to fulfill China's pledge in the initial trade deal it signed with the United States in January this year.
While a Biden administration is expected to soften some of the rhetoric seen in strained U.S.-China trade relations in recent years, there are no immediate signs the President-elect intends to unwind the punitive tariffs introduced under the Trump administration.
Although China's imports were weaker than expected, volumes continued to rise on a sequential basis, said Louis Kuijs of Oxford Economics.
"We expect goods imports to grow further into 2021, underpinned by strong domestic demand, with imports of capital goods to be better supported than those of commodities," Kuijs said.
China's iron ore and copper imports both fell in November from the previous month, customs data showed. Crude oil imports in rose as customs continued to clear a backlog.