Interesting Numbers Coming Out of China


China’s domination of world commerce in the aftermath of the Wuhan coronavirus epidemic was reinforced on Friday.

Annual figures showed the country’s trade surplus reaching a new record of $676 billion in 2021, up 26% from 2020 and fueled by a 30% increase in exports.

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What’s Going On?

The Financial Times (FT) reported on Friday that China’s exports increased by double digits in every month of 2021.

The jump in exports, according to Larry Hu of Australia’s Macquarie Research, was enough to “balance the downturn in housing, as well as the very weak demand” reported by China.

“Shortly after internal cases of the virus decreased to a trickle and lockdowns were enacted in other nations across the world, China’s exports started to rebound again after a steep drop in early 2020.”

Despite extensive delays and obstructions across logistics services, exports continued to rise until 2021, according to the Financial Times.

The woes of Evergrande, the colossal Chinese property giant that spent much of 2021 on the verge of bankruptcy, epitomize the slump in the property market.

Evergrande reached an agreement with investors on Friday to postpone payments on a $708 million debt, averting China’s first public stock market failure.

“The transition demonstrates how large Chinese debtors like Evergrande can manage to take in financial worlds,” the Wall Street Journal noted.

“Creditors onshore occasionally are taking a different approach than their global peers with marketplaces in China slightly shielded from defaults offshore.”

Evergrande, as well as other Chinese real estate companies, is not yet out of the woods. The South China Daily Post (SCMP) forecasted a “dark” year ahead, with more financial crises, a prolonged drop in home sales, and the threat of property tax hikes.

The Property Market is Not Doing Well

According to the SCMP, investors lost nearly $90 billion of aggregate market value in Chinese property companies last year, while the real estate benchmark dropped $126 billion in worth.

In the first and second parts of this year, Chinese developers will have about $20 billion in overseas bonds due, nearly quadruple the amount due within the last quarter of 2021.

In terms of weak consumer demand, the Financial Times blamed China’s “tight pandemic policy to decrease COVID [Chinese coronavirus] cases,” which included recent citywide lockdowns.

Natural calamities such as floods, computer chip shortages, and Chinese regulatory clampdowns on firms have all been cited as factors in lower demand by other analysts.

According to the Financial Times, 2022 will be a high year for Chinese goods. This comes as a downward trend in growth that began in September continued, while the rest of the world recovers from the virus China launched.

China has also been stockpiling more food and minerals than is measurable. One wonders what the Chinese government is planning, especially now with regards to the issues around Taiwan.