HONG KONG: China’s exports grew faster than expected in December as factories scrambled to fill orders in anticipation of increased tariffs threatened by US President-elect Donald Trump once he takes office.
Exports rose 10.7% from the same month last year, exceeding economists’ expectations for a 7% increase. Meanwhile, imports rose 1% from a year earlier, contrary to analysts’ expectations for a 1.5% decline. Exports exceeded imports, and China’s trade surplus soared to $104.84 billion.
President Trump has promised to raise tariffs on Chinese goods and close loopholes currently used by exporters to sell their products cheaper in the United States. If these plans take effect, they are expected to increase prices in the U.S. and squeeze sales and profit margins for Chinese exporters. However, Capital Economics’ Jichun Huang said Chinese exports will remain strong in the near term as companies rush to bring forward expected tariff hikes. “Overseas shipments are likely to remain resilient, supported by further global market share gains due to real effective exchange rate depreciation,” Huang said in a note. Nevertheless, she warned that exports could slow later this year if President Trump follows through on his tariff threats.
According to a report by Beijing authorities, China’s total imports and exports in 2024 will reach a record high of 43.85 trillion yuan (approximately $6 trillion), an increase of 5% from the previous year. According to Wang Lingjun, deputy director of the General Administration of Customs, China remains the world’s largest exporter and a major trading partner of more than 150 countries and regions. Exports soared even as other sectors of China’s economy slowed, due in part to the pandemic and a downturn in the housing industry. Under President Xi Jinping, the ruling Communist Party has pushed to upgrade factories and move toward high-tech manufacturing.
The report highlighted that China’s exports of mechanical and electrical products increased by nearly 9% in 2024, and exports of high-end equipment increased by more than 40%. We saw impressive growth in certain sectors, with exports of electric vehicles increasing by 13%, 3D printers increasing by about 33%, and shipments of industrial robots increasing by 45%. E-commerce value, including sales from companies such as Temu, Shein and Alibaba, reached 2.6 trillion yuan ($350 billion), more than double the 2020 level.
China is aiming to increase imports, but the value of imports still falls short of exports, partly due to falling prices of major products such as oil and iron ore. Officials noted that there is still significant room for growth in imports, citing China’s large market capacity and vast potential. However, trade restrictions prevent China from importing some products, particularly in strategically sensitive areas such as advanced semiconductors and military items. “Some countries are politicizing economic and trade issues and unduly restricting exports of certain products to China. Otherwise, we would import more,” said Lu Daliang, spokesperson for the Chinese Customs Bureau. ” he said.
China has sought to expand trade with countries participating in the Belt and Road Initiative, which focuses on infrastructure construction and trade in much of the world. Trade with these countries accounted for about half of China’s total trade last year. Additionally, China has eliminated tariffs on imports from the world’s poorest countries. While China values trade with these new partners, it also maintains strong trade relationships with traditional markets such as Europe and the United States. Two-way trade with the United States grew nearly 5% last year, with China importing agricultural products, energy, medicine, food and more. It imports aircraft from the United States and exports clothing, home appliances, and consumer electronics in return.
U.S. officials and commentators have expressed concern that China’s export expansion is an attempt to offset weak domestic demand as the economy slows. They argue that China faces an “overcapacity” problem, with factories in certain industries operating well below capacity. However, Chinese officials rejected this idea. “This is a false proposal,” said Wang Lingjun, deputy director of the General Administration of Customs.
He added that China’s industry has become more efficient through upgrading, investment and innovation supported by research and development. He further emphasized that China’s complete manufacturing chain has contributed to stabilizing the world’s production and supply chains, promoting technological progress and industrial sophistication around the world.
