Photo: Yang Hui/GT

The world’s factory was humming in the third quarter as China posted a better-than-expected 10.2 percent increase in exports amid the rampant spread of COVID-19 globally, with foreign demand warming up and domestic manufacturing activity getting back to normal, supporting quarterly GDP growth in the medium to high range.

Exports jumped 10.2 percent year-on-year to 5 trillion yuan ($742 billion) in the third quarter while imports were up 4.3 percent to 3.88 trillion yuan, the General Administration of Customs (GAC) said on Tuesday.

The rapid growth rate, one of the fastest among the world's exporting nations, was in line with forecasts by analysts and financial institutions, and the expansion was in part due to stronger exports of medical supplies, home appliances and consumer electronics.

China's foreign trade in 2020 Q1-Q3 Infographic: Yang Ruoyu/GT

 
Tian Yun, vice director of the Beijing Economic Operation Association, told the Global Times that China's third-quarter export growth, at more than 10 percent, was unexpectedly high compared with recent years and surely topped the world.

According to Tian, the growth reflected a global supply gap, as other countries' production capacity contracted while their demand persisted, particularly thanks to overseas governments' policy stimulus. This has generated opportunities for China to make products for them. 

"If the pandemic persists, China's exports will likely continue to grow strongly in the first two quarters of next year, and first-quarter exports can grow by 20-30 percent," he predicted.

Liu Xuezhi, a macroeconomics expert at the Bank of Communications, told the Global Times on Tuesday that one of the reasons for China's stronger export performance compared with other nations is that the Chinese manufacturing sector is able to scale up production quickly to produce what's necessary at a time of a global pandemic, including medical instruments such as ventilators and consumer items, when millions of people are confined to their homes. 

China Inc also benefited greatly from its earlier resumption of work and production in the second quarter after the epidemic was controlled on the home front, allowing many companies to complete old orders and get new ones.

For the first nine months, China's total foreign trade expanded 0.7 percent year-on-year to 23.12 trillion yuan, recovering from a 6.4- percent contraction in the first quarter and continuing a consolidating trend that began in the second quarter.

The trade figures make China the first major world economies to recover from the COVID-19 pandemic, which has weighed on demand and disrupted global supply chains.

“A fast expansion in exports plus a sudden widening of the trade surplus in the third quarter will provide an evident boost to GDP growth, putting it the medium to high range,” Liu told the Global Times.

Tian agreed, noting that foreign trade was likely the sector that contributed the most to China’s GDP growth in the third quarter. He estimated that third-quarter GDP grew at least 5 percent. 

China’s trades with the US grew by 2 percent in the first three quarters to 2.82 trillion yuan, despite a trade war launched by the Trump administration.

"This should mean that economic ties between China and the US are closer despite cooling political relations, and that rationality is getting the upper hand in the US government in terms of policies toward China," Tian said.

Looking into the fourth quarter, Chinese exporters will still face rising headwinds from possible worsening of the global pandemic during the coming winter and slumping world demand, analysts said.

But most analysts still believe that China could achieve trade growth this year.

ASEAN remained China’s largest trading partner in the first three quarters, according to the GAC.