China-US trade is up 28.7% in 2021 as Phase 1 deal approaches two-year mark - Market News
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China-US trade is up 28.7% in 2021 as Phase 1 deal approaches two-year mark

China's Foreign Trade in 2021. Image: Feng Qingyin/GT

China’s Foreign Trade in 2021. Image: Feng Qingyin/GT

China-US trade grew 28.7 percent year-on-year in US dollars in 2021 to a staggering $755.6 billion, and the US trade deficit with China continued to widen, Chinese customs data showed. on Friday, maintaining strong growth momentum, even with additional tariffs and bruising of political tensions casting a shadow on bilateral ties.

The number, which falls just one day before the second anniversary of the signing of the first trade agreement, shows strong complementarity between the world’s two largest economies, while also demonstrating China’s commitment to fulfilling its obligations under the deal. the past two years, observers said.

According to Chinese customs data released Friday, Chinese exports to the US rose 27.5 percent year-over-year in 2021, while imports rose 32.7 percent.

In addition, the US maintained its place as China’s third trading partner, after ASEAN and the European Union. The trade volume between China and the US was twice that of China’s trade volume with its fourth largest trading partner Japan, at 2.4 trillion yuan.

China USA Photo:Global Times

China USA Photo:Global Times

Increasing US deficit

Friday’s numbers point to continued growth momentum from 2020, when trade between the world’s two largest economies was back on a growth path, following a plunge in 2019 as crackling trade tensions hampered bilateral imports and exports.

In particular, China’s trade surplus with the US was $39 billion in December and $396.5 billion for all of 2021, increasing further from a surplus of $357.5 billion recorded in the first 11 months, according to the Global Times calculations.

The widening contrasted with US ambitions to narrow the gap — one of the main reasons for former US President Donald Trump to launch the trade war against China. Most of the additional tariffs have remained in effect under the Biden administration.

“The growing deficit proves that tariffs cannot solve any problem,” Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing, told the Global Times on Friday, calling for efforts to increase tariffs as soon as possible. abolish.

The abolition of additional tariffs is the wish of the American business community. “We’d like to see tariffs cut for both sides or abolished altogether… There have been job losses in the US and increased costs on imported items due to tariffs costing the average household more than $400 a year” , the US-China Business Council (USCBC) said in an interview with the Global Times via email.

Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing, predicted that by 2022 it is possible that China’s imports from the US would “increase on a large scale” as many deals are “negotiated”, he stressed. that purchases should be based on fair prices and China’s own requirements.

What’s next?

Ahead of the two-year anniversary, there are also growing discussions about the results of the phase-one agreement and the next step for the world’s two largest economies.

Some in the US argue that China has failed to meet its target for purchasing US products and services, while many in China point to the escalating US crackdown on Chinese companies and ongoing tariffs and other restrictions, as well as uncontrollable external factors such as the pandemic. .

Notably, US crackdown on China’s tech sector has expanded from 5G to artificial intelligence and biotechnology, in a desperate attempt by the US to maintain its shaky technological dominance.

China’s Ministry of Commerce spokesman Shu Jueting said on Thursday that since the first phase came into effect, China has been working to overcome several adverse factors, including the COVID-19 pandemic, a global economic recession and supply chain disruptions. , to push for the joint implementation of the deal.

“There is no doubt that the deal will benefit China and the US as well as the world…Trade teams from both sides will maintain normal communications and if there is more information, we will release it immediately,” Shu said in a statement. conference held in Beijing on Thursday.

The twists and turns may continue, but trade can still act as a buffer and cornerstone in China-US relations, observers said, noting that first and foremost, China will firmly protect the interests of its businesses and people.

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Anna Wintour

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