China’s imports in December recorded an unexpected jump, exports exceeded expectations

China’s December trade data came in well ahead of expectations, with exporters continuing to ramp up shipments as concerns over additional tariffs grew, while the country’s stimulus measures appeared to have started to support domestic consumption.

Exports in December grew by 10.7% compared to last year, according to data from China customs authorities showed on Mondaybeating expectations for a 7.3% rise in a Reuters poll. That compares with a 6.7% increase in November and a 12.7% jump in October.

Customs data showed imports rose 1.0% last month from a year earlier, reversing contractions in the previous two months.

Analysts predicted a drop in imports by 1.5% year-on-year. This compares with a a larger drop of 3.9% in November and 2.3% in October.

Last year, China’s total exports in yuan terms jumped 7.1% from a year earlier, accelerating from modest growth of 0.6% in 2023This was announced by customs representatives at a press conference on Monday.

China’s imports last year grew by 2.3%, rising from a drop of 0.3% in 2023.

“We believe that increased fiscal spending, much of which is likely to remain investment-focused, will boost construction activity and boost demand for industrial goods in the coming months,” said Jichun Huang, China economist at Capital Economics.

A prolonged real estate crisis has hit domestic demand, making the country more dependent on exports to fuel growth.

Economists expect that trade will greatly supported China’s economic growth last year. GDP data is due later this week.

Exports have been a rare bright spot in China’s battered economy amid 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.

Export of electric vehicles and semiconductors increased by 13.1% and 18.7% last year, respectivelycustoms officers report.

Trump, who is due to be inaugurated on January 20, has fueled fears of increased tariffs on Chinese exports. He has promised an additional 10% tariffs on all Chinese goods entering the US

Since late September, Chinese authorities have stepped up policy support to prop up the country’s economy as growth falters and social tensions rise. But “remnants of caution and restraint remain,” Gabriel Wildau, Teneo’s managing director, said in a note last Friday.

China has lower the political raterelaxed restrictions on the purchase of real estateand also introduced liquidity to the financial market opening a debt exchange program to ease the budget burden of local authorities.

“While senior leaders recognize the need to boost real GDP growth, Xi remains reluctant to embrace the additional stimulus needed to combat deflation,” Wildau added.

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

Among the slew of key economic data available this week, China will release its full-year and fourth-quarter GDP figures on Friday. According to a Reuters survey, in the last quarter of 2024, growth is planned for 5.1% on an annual basis.

For this year, the top management has promised to make a promotion domestic consumption is the main priority while expanding budget spending to finance trade-in consumer goods and equipment modernization policies. Launched last Julythe exchange program subsidizes consumers trade in old cars or household appliances and buy new ones at a discount.

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