China’s General Administration of Customs is set to release its October balance of trade figures. The balance of trade is
China’s General Administration of Customs is set to release its October balance of trade figures.
The balance of trade is a key indicator of Chinese economic activity and measures the country’s net exports compared to net imports. Chinese manufacturing in September showed strong signs of productivity following the release of October’s PMI, while an unofficial ban on billions of dollars worth of Australian imports may artificially push China’s net trade balance higher. September’s trade surplus was unexpectedly low at $37 billion despite record levels of exports and imports. October’s figure is expected to be around $46 billion.
If the figure comes in below the $46 billion benchmark, it may indicate an economic policy shift to boost domestic consumerism, a long-term strategy of Beijing. The COVID-19 pandemic has accelerated President Xi Jinping’s “dual-circulation” plan in which Chinese manufacturing for domestic consumption becomes the bedrock of the Chinese economy.
A domestically driven economy would leave Beijing with extra influence to exert internationally. If the shift to “dual-circulation” is successful, expect Beijing to use even more asymmetric economic tactics, like the informal ban on Australian imports, against Western nations that take a strong stand against Beijing’s human rights abuses and territorial expansionism.