An aerial view of a container ship leaving the dockyard in Qingdao in east China’s Shandong province.
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China’s trade data in December beat expectations by a large margin, with exporters continuing to frontload shipments as worries over additional tariffs mount, while the country’s stimulus measures appear to be supporting demand in the industrial sector.
Exports in December jumped 10.7% in U.S. dollar terms from a year earlier, data from China’s customs authority showed Monday, beating the expectation of a 7.3% growth in a Reuters poll. That compares with a 6.7% growth in November and a spike of 12.7% in October.
Customs data showed imports rose 1.0% last month from a year earlier, reversing from the contraction in the preceding two months. Analysts had forecast imports to fall 1.5% on year. That compares with a bigger drop of 3.9% in November and 2.3% in October.
Last year, China’s yuan-denominated total exports jumped 7.1% from the previous year, accelerating from a modest growth of 0.6% in 2023, customs officials said at a press conference on Monday.
China’s imports last year rose 2.3%, picking up from a fall of 0.3% in 2023.
“Outbound shipments are likely to stay resilient in the near-term, supported by further gains in the global market share,” Zichun Huang, China economist at Capital Economics, said in a note, thanks to a weak yuan.
The outlook for exports this year, however, appears less optimistic, as “potential tariff hikes could dampen momentum,” said Bruce Pang, distinguished senior research fellow at the National Institution for Finance and Development.
“In the short term, import volumes are also expected to rebound further, driven by stronger demand for industrial commodities, with accelerated fiscal spending,” Pang added.
A prolonged real estate crisis has hit China’s domestic demand, leaving the country more reliant on exports to power its growth.
Economists expect exports to have significantly supported China’s economic growth last year. GDP data is due later this week.
Exports have been a rare bright spot in China’s battered economy amid heightened trade tensions with its major trading partners — U.S., European Union — but this growth could be jeopardized after U.S. President-elect Donald Trump returns to the White House.
Exports of electric vehicles and semiconductors increased 13.1% and 18.7% last year, respectively, according to the customs officials.
Looming risks
Trump — who is set to be inaugurated on Jan. 20 — has stoked fears about higher tariffs on Chinese exports. He has pledged an additional 10% tariffs on all Chinese goods entering the U.S.
Chinese authorities have since late September ramped up policy support to prop up the country’s economy as growth staggers and social tensions mount. But “a residue of caution and restraint remains,” Gabriel Wildau, managing director at Teneo said in a note last Friday.
China has cut policy rates, loosened property purchases restrictions, injected liquidity into the financial market as well as unveiling a debt-swap program to alleviate local governments’ fiscal strains.
“Though top leaders recognize the need to boost real GDP growth, Xi still appears reluctant to embrace the additional degree of stimulus required to combat deflation,” Wildau added.
“Policymakers need to keep some stimulus powder dry to enable an ample response if the tariff impact is severe,” he said, suggesting that the uncertainty about exports growth creates an additional reason for Beijing to avoid a “big bang [stimulus] approach.”
Among a slew of key economic data on tap this week, China is set to release its full-year as well as fourth-quarter GDP figures on Friday. The growth is pegged at 5.1% year on year in the final quarter of 2024, according to a Reuters poll.
For this year, the top leadership pledged to make boosting domestic consumption a top priority while expanding fiscal spending to fund the consumer goods trade-in and equipment upgrade policy. Launched in July last year, the trade-in program subsidizes consumers to swap old cars or home appliances and buy new ones at a discount.
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