August 2021 Trade Bulletin

Highlights of This Month’s Edition

• Bilateral Goods Trade: Through June 2021, U.S. year-to-date goods trade deficit with China rose by 20.4 percent, reflecting increased U.S. consumption and Chinese production; in Q2 2021, computers and chemicals led U.S. exports to China and U.S. exports of advanced technology products were up 31.2 percent year-on-year.
• Bilateral Services Trade: In Q1 2021, the U.S. surplus with China in services continued to decline for the sixth consecutive quarter to $4.3 billion as global travel restrictions continue to hurt U.S. travel services exports; U.S. exports of personal, cultural, and recreational services grew due to a shift to online services.
• Regulatory Clampdown: The Chinese government’s widening crackdown on companies across tech, social media, and education sends stock markets reeling; by one estimate, U.S.-listed Chinese companies lost around $400 billion in value in July 2021 alone; U.S. SEC issues a warning to U.S. investors.
• Quarterly Review of China’s Economy: China’s economy grew 7.9 percent year-on-year in Q2 2021, according to official statistics, but momentum is dissipating as construction of property and infrastructure slows.
• Monetary Policy: Chinese policymakers cut the reserve requirement ratio for the first time since April 2020, giving banks more leeway to lend out money and repay loans to the central bank but avoiding broader monetary stimulus.
• China’s Asset Management Companies: China’s national asset managers come under regulatory pressure amid renewed concerns about the sustainability of China’s debt levels and nonperforming loan disposal.
• Emissions Trading Scheme: China’s nationwide emissions trading scheme, which began trading in July, is limited in its initial scope as policymakers do not want to constrain economic growth.