Weather 
Beijing
Reuters
China’s exports gained momentum in December, with imports also showing recovery, though strength at the year-end was in part fueled by factories rushing inventory overseas as they braced for heightened trade risks under a Trump presidency.
Exports have been a vital growth engine for the $18 trillion economy, which is still burdened by a prolonged property crisis and shaky consumer confidence. While policymakers can find solace in recent policy measures keeping the economy on track for an “around 5%” growth target, challenges such as potential US tariff hikes cloud the outlook for 2025.
US President-elect Donald Trump, set to return to the White House next week, has proposed hefty tariffs on Chinese goods, sparking fears of a renewed trade war between the two superpowers.
Adding to the challenges, unresolved disputes with the European Union over tariffs of up to 45.3% on Chinese electric vehicles threaten to hinder China’s ambitions to expand its auto exports and help address deflationary overcapacity concerns.
“Trade front-loading became more visible in December as a result of both Chinese New Year effects and Donald Trump’s inauguration,” said Xu Tianchen, senior economist at the Economist Intelligence Unit. China’s biggest festival runs from January 28 to February 4.
“Import growth could be underpinned by stockpiling of commodities like copper and iron ore, as part of (China’s) ‘buy low’ strategy,” he added.
Outbound shipments in December rose 10.7% year-on-year, customs data showed on Monday, beating 7.3% growth forecast in a Reuters poll of economists, and improving from November’s 6.7% increase.
Imports surprised to the upside with 1.0% growth, the strongest performance since July 2024. Economists had expected a 1.5% decline.
China’s trade surplus grew to $104.8 billion last month, up from $97.4 billion in November. Its trade surplus with the US widened to $33.5 billion over the same period from $29.81 billion a month prior.
A Chinese customs spokesperson told reporters there was still “huge” room for China’s imports to grow this year.
Buoyed by a weakening yuan, Chinese manufacturers managed to find buyers overseas in 2024 to compensate for depressed domestic demand by continually reducing prices, analysts said.
As a result, China’s exports grew by an annual 5.9% last year, while imports increased just 1.1% over the same period.
“The double-digit rise in December exports (led by the US and ASEAN), along with the increase in the PMI new export orders, supports our earlier judgment that the threat of tariffs could affect export patterns in the next couple of quarters, with a potential boost in shipments before the introduction of new tariffs, followed by a drop-off,” Barclays analysts said in a note.
“Overall, we think the modest increase in imports and easing CPI inflation suggest the recent domestic demand recovery is still too shallow and too weak.”
Market reaction was muted to the trade data. The yuan hovered near 16-month lows against the dollar, while key share indexes were down.
Signs of stabilization have emerged following China’s recent stimulus push.
Factory activity remained in modest expansion for the third consecutive month, while services and construction recovered in December, an official survey showed.
South Korea, a key indicator of China’s imports, reported a 8.6% increase in shipments to China in December, suggesting resilience in demand for technology products.
China’s iron ore imports in 2024 rose for a second straight year to hit a new peak, as lower prices spurred buying and demand remained resilient despite the country’s protracted property crisis continuing to weigh on steel demand.
The world’s largest agricultural importer also bought a record amount of soybeans last year, after buyers concerned about US-China trade tensions rushed to secure US soybeans ahead of incoming US president Donald Trump’s inauguration.
But crude oil imports fell last year, the data showed, marking its first annual decline in the last two decades outside the Covid-19 pandemic-induced falls, as tepid economic growth and peaking fuel consumption dampened purchases.
China’s top leaders have pledged to loosen monetary policy and adopt a more proactive fiscal policy in 2025, aiming to offset external pressures and revitalize domestic demand.
The government is targeting economic growth of around 5% for the year, a goal that had proved challenging to achieve at times in 2024.
