February 2021 Trade Bulletin

Highlights of This Month’s Edition

• Bilateral Trade: U.S. goods exports to China rose in 2020, but China still fell short of its purchase commitments under the Phase One trade deal; China’s agricultural imports more than doubled in Q4 2020; in Q3 2020, an increase in financial services exports to China was the exception to a sustained downward trend in the U.S. services trade with China.
• Biden Administration China Policy Preview: Early statements from the Biden Administration signal continuity with Trump-era policies but with a renewed focus on multilateralism.
• Quarterly Review of China’s Economy: China’s economy grew 2.3 percent year-on-year in 2020, bolstered by strong industrial growth; China’s retail and service sectors point to an imbalanced economic recovery and underscore struggles to increase consumption; fearing a property market bubble, policymakers introduce more stringent restrictions on real estate loans.
• Fintech Crackdown: In annual work conferences, China’s financial authorities pledge tightened supervision of fintech companies, fortifying the role of state-owned banks in China’s financial system.
• Household Non-Performing Loans: Regulators shift focus to household NPLs as campaign to clean up soured debt in China’s economy continues apace.
• SOE Bond Default Fallout: Beijing continues to push for discipline in China’s corporate bond market as state-backed issuers suffer fallout from high-profile defaults in late 2020.
• Stock Markets: China’s stock market continued a ten-month-long rally on China’s 2020 recovery, but liquidity and leverage raise concerns of a bubble.