Czech 2013 trade surplus soars amid expectations of even stronger exports
Czech exporters delivered a strong performance in 2013 with the trade surplus continuing to rise. But a more detailed look at the goods being traded and bilateral relations show familiar strengths and weaknesses.
Taking a bit of a longer perspective, the latest figures confirm the steady trend of increasing annual trade surpluses in spite of the gloomy global economic environment. Surpluses for 2010 were around 121 billion crowns and for 2011 191 billion crowns. Some economists are now saying that the Czech trade surplus for this year could top the 400 billion crown mark.
The gloss from the Czech Statistics Office is a by now familiar one of increased exports of transport equipment (read mainly cars and trams) engineering and industrial equipment and a deepening deficit in mineral oils, (read oil and any of its derivatives).
A closer look at the figures will confirm many familiar trade patterns as regards export and import countries. Trade is like a very large ship whose course, once set, is very difficult to change. So far, a detailed country breakdown of exports and imports is only available for the first 11 months of 2013. But the main features are starkly shown.
One of the main features is perhaps the massive trade deficit with China. It had mounted to 237.8 billion crowns by the end of November, slightly down on the 245 billion crown total of the same period during 2012. Increased Czech exports accounted for only an around 4 billion crown dent in the latest deficit figure, they rose to 34.2 billion crowns, with supressed Czech domestic demand the most probable cause.
Altogether, the Chine trade deficit runs at a level which almost cancels out the Czech trade surplus with its single biggest trading partner, Germany. It is not surprising then that Czech President Miloš Zeman is looking to have talks with his Chinese counterpart at the Winter Olympics in Sochi, Russia, and set up an official visit to China later in the year.
For the moment, Chinese imports in the form of more tourists visiting the Czech Republic might be the quickest route to correcting the massive imbalance in cash outflows and inflows. Czech business daily, Hospodářské Noviny, reported Thursday that the Czech Republic is looking to open two new consulates in China with the main task of processing tourist visas and helping develop business links. The Czech flag currently flies in Beijing, Hong Kong, and Shanghai.
Trade relations with the EU, accounting for around 80% of Czech two-way trade, have been stable, some might say flat, over the past two years. In the first 11 months of 2013, the Czech Republic was running a surplus of around 707 billion crowns with other EU countries, up from the 684 billion crown total of the same period in 2012. The 250 billion crown surplus with Germany was almost unchanged. Generally speaking, the Czech Republic runs a trade surplus with most developed countries and a deficit with most developing countries.
Perhaps one surprising fact is the relative weakness of trade relations with the US. Two-way trade slipped to around 118 billion crowns from January to November last year with an 8.1 billion crown surplus in favour of Czechs. The total trade volume is less than half that with Russia, which stood at 249 billion crowns over the same period. Thanks largely to oil and gas exports, the trade deficit with Russia was around 33 billion crowns.