Beijing
Reuters
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China’s exports gained momentum in December and imports also showed signs of recovery, but the strong year-end performance was driven in part by factories rushing to stock up overseas in preparation for heightened trade risks under the Trump administration. .
Exports are a vital growth driver for the $18 trillion economy, which remains beset by a persistent real estate crisis and fragile consumer confidence. Policymakers find comfort in recent policies that have put the economy on track for a growth target of “about 5%,” but challenges such as possible U.S. tariff increases raise the outlook for 2025. It clouds the.
US President-elect Donald Trump, who is due to return to the White House next week, has proposed steep tariffs on Chinese goods, raising fears of a renewed trade war between the two superpowers.
Adding to the challenges, China’s unresolved dispute with the European Union over tariffs of up to 45.3% on electric vehicles threatens to hamper China’s ambitions to expand car exports and address deflationary overcapacity concerns. There is.
“Trade frontloading was more pronounced in December as a result of both the Lunar New Year effect and President Donald Trump’s inauguration,” said Shu Tiancheng, senior economist at the Economist Intelligence Unit. China’s biggest festival will be held from January 28th to February 4th.
“Import growth could be supported by stockpiling of commodities such as copper and iron ore as part of (China’s) ‘buy cheap’ strategy,” he added.
Customs figures on Monday showed overseas shipments rose 10.7% in December from the same month a year earlier, exceeding expectations in a Reuters survey of economists of 7.3% and 6.7% in November. improved from an increase.
Imports unexpectedly increased by 1.0%, the strongest growth since July 2024. Economists had expected a decline of 1.5%.
China’s trade surplus last month was $104.8 billion, up from $97.4 billion in November. During the same period, the trade surplus with the United States expanded to $33.5 billion from $29.81 billion the previous month.
A Chinese customs spokesperson told reporters there was still room for a “significant” increase in imports from China this year.
Analysts say Chinese manufacturers, buoyed by the weaker yuan, will be able to find buyers abroad in 2024 as continued price cuts offset the drop in domestic demand.
As a result, China’s exports grew at an annual rate of 5.9% last year, while imports increased by only 1.1% over the same period.
“December’s double-digit increase in exports (led by the US and ASEAN) and increase in PMI new export orders confirm our previous judgment that the threat of tariffs could impact export patterns in coming quarters. Analysts at Barclays said shipments could rise before the new tariffs are introduced and then fall.
“Overall, we believe the modest increase in imports and moderation in CPI inflation suggest that the recent recovery in domestic demand is still shallow and too weak.”
Market reaction to the trade data was muted. The yuan hovered near a 16-month low against the dollar, while major stock indexes fell.
There are signs of stabilization following China’s recent economic stimulus package.
Factory activity expanded only modestly for the third month in a row, while services and construction rebounded in December, according to an official survey.
South Korea, a key indicator of China’s imports, reported an 8.6% increase in shipments to China in December, suggesting resilience in demand for technology products.
In 2024, China’s iron ore imports increased for the second consecutive year and hit a new peak. This was as falling prices encouraged buying and demand remained resilient despite the country’s protracted real estate crisis weighing on steel demand.
The world’s largest importer of agricultural products sold a record amount of soybeans last year as buyers concerned about U.S.-China trade tensions rushed to secure U.S. soybeans ahead of President-elect Donald Trump’s inauguration. I bought soybeans.
But data showed crude oil imports fell last year for the first time in two decades, excluding declines caused by the coronavirus pandemic, as slowing economic growth and plateauing in fuel consumption slowed purchases. Ta.
Chinese leaders have pledged to ease monetary policy and introduce more aggressive fiscal policy in 2025, aiming to offset external pressure and boost domestic demand.
The government aims for economic growth of around 5% a year, but this goal could be difficult to reach in 2024.
