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China's export share grew in pandemic but may be near peak, UNCTAD says

·1-min read
FILE PHOTO: Containers are seen at the Yangshan Deep Water Port in Shanghai

GENEVA (Reuters) - China's share of global exports has increased during the COVID-19 pandemic to close to 15% although its dominance may soon peak as domestic demand grows and the cost of labour rises, U.N. agency UNCTAD said on Tuesday.

In 2020, China had the largest share of global exports in goods with 14.7% of the total compared with 13.2% in 2019, according to data from the U.N. Conference on Trade and Development. The United States came second with 8.1% and Germany third with 7.8%.

Early data from this year suggests a continuation of the trend with Chinese exports surging almost 50% year-on-year to $710 billion in the first quarter, the UNCTAD data showed.

"Overall, China is likely to remain the world's leading exporter for the near future," the UNCTAD commentary said. "However, its exports dominance in the global economy may be approaching its peak."

It gave several reasons for this including its growing reliance on domestic, not foreign demand, rising labour costs and increased automation that could spur more manufacturing to "reshore" to developed countries.

It also said that geopolitical tensions and lack of global action to address social and environmental concerns could lead to a "deglobalisation process" that would have stronger-than-average implications for major exporters like China.

One of the major factors that helped Beijing emerge as an export powerhouse was its accession to the World Trade Organization in 2001, UNCTAD said. At that time, China's share of exports was less than 5% of the total.

Trade rival the United States has criticised China's claim for concessions as a developing country under WTO rules given its fast economic growth.

(Reporting by Emma Farge; Editing by Alison Williams)