China’s December imports jumped unexpectedly, exports exceeded expectations

China’s trade data in December beat expectations by a wide margin, with exporters continuing to forecast shipments as concerns over additional tariffs mount, while the country’s stimulus measures are supporting demand in the industrial sector.

December exports rose 10.7% in US dollar terms from a year earlier, according to Chinese data. customs authorities showed on MondayBeating expectations for 7.3% growth in a Reuters poll. This compares to a 6.7% increase in November and a 12.7% increase in October.

Customs data showed imports rose 1.0% last month from a year earlier, reversing contractions in the previous two months. Analysts had predicted that imports would fall by 1.5% for the year. That compares with a A larger decrease of 3.9% in November and 2.3% in October.

Last year, China’s total yuan-denominated exports rose 7.1% from the previous year, accelerating. Modest growth of 0.6% in 2023customs officials said in a press conference on Monday.

China’s imports rose 2.3% last year, an increase A decrease of 0.3% in 2023.

“Outbound shipments are likely to be resilient in the near term, supported by further global market share gains,” Zichun Huang, China economist at Capital Economics, said in a note, thanks to a weaker yuan.

The outlook for exports for the rest of the year, however, looks less optimistic, as “tax hikes could dampen momentum,” said Bruce Pang, senior research fellow at the National Institute of Finance and Development.

“In the short term, import volumes are also expected to rebound further, driven by higher demand for industrial products, accelerating fiscal spending,” Pang added.

China’s domestic demand has been hit by a prolonged housing crisis, and the country is becoming more dependent on exports to fuel its growth.

Economists expect exports to be It contributed significantly to China’s economic growth last year The country’s full-year GDP data will be released later this week.

Exports have been a rare bright spot in China’s battered economy after heightened trade tensions with its main trading partners — the United States, the European Union — but that growth could be at risk after U.S. President-elect Donald Trump returns to the White House.

This year, China will need to focus more on boosting domestic demand as the external push fades, Gary Ng, senior economist at Natixis, told CNBC in an email. “China’s deflationary pressure on the manufacturing sector may continue to fuel further geopolitical tensions,” he added.

Weak consumer sentiment, uneven real estate recovery and tepid growth in local government infrastructure projects continue to slow domestic demand recovery, Ng said.

Shipments to most markets rose in December, with double-digit increases to the Association of Southeast Asian Nations and the United States, with exports rising 18.9 percent and 15.6 percent, respectively, from a year earlier, according to CNBC estimates of official customs data. .

US imports rose 2.6% in December and ASEAN — China’s largest trading partner — 5.4%.

Exports to the European Union increased by 8.76% and imports decreased by 4.9%. The country’s exports to BRICS partner Russia increased by 5.5% and imports decreased by 4.7%.

Last year, China’s exports of electric vehicles and semiconductors They grew by 13.1% and 18.7% last year, respectivelyaccording to customs officials.

Meanwhile, the country’s steel exports hit their highest level since 2015, with shipments at 110.7 million tonnes, as the country struggled to make up for weak domestic demand due to a property crisis and a slowdown in manufacturing activities.

Trump – who is due to take office on January 20 – has raised fears about the increase in tariffs on Chinese exports. has He has promised additional fees of 10% on all Chinese goods entering the US

Chinese authorities have stepped up political aid since late September to boost the country’s economy as growth and social tensions escalate. But “a residual amount of caution and restraint remains,” Teneo managing director Gabriel Wildau said in a statement last Friday.

China has it cut policy ratesreleased property purchase restrictionsbecause it injected liquidity into the financial market introduced the debt swap program to relieve the fiscal strains of local governments.

“While top leaders recognize the need to boost real GDP growth, Xi is still reluctant to provide the additional stimulus needed to combat deflation,” Wildau added.

“Policymakers need to keep some stimulus powder dry to allow for a broad-based response if the impact of tariffs is severe,” he said, suggesting that uncertainty about export growth creates an additional reason for Beijing to avoid a “big bang (stimulus) approach.”

Among the key economic data this week, China will release its full-year and fourth-quarter GDP data on Friday. Growth is 5.1% year-on-year in the last quarter of 2024, according to a Reuters poll.

This year, the top management committed to giving it a boost home consumption is the main priority expanding the fiscal expenditure to finance the trade of consumer goods and the renewal of equipment. It was launched in July last yeartrade-in programs subsidize consumers trade in old cars or appliances and buy new at a discount.