By Ellen Zhang, Joe Cash and Ethan Wang
BEIJING (Reuters) -China’s exports gained momentum in December, with imports also showing recovery, though strength at the year-end was in part fuelled 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 U.S. tariff hikes cloud the outlook for 2025.
U.S. 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 Jan. 28 to Feb. 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 U.S. 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 U.S. and ASEAN), along with the increase in the PMI new export orders, supports our earlier judgement 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.
