China’s export surge amid trade tensions

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.

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.