HONG KONG — In November, China experienced a slowdown in exports alongside a drop in imports, falling short of economists’ expectations and highlighting potential vulnerabilities in the nation’s trade sector. This situation arises as Chinese officials are focused on revitalizing the economy following the disruptions caused by the COVID-19 pandemic.
Customs statistics released on Tuesday revealed that exports increased by 6.7% compared to the same month the previous year, a significant decline from the 12.7% growth recorded in October. Analysts had projected that exports would see an increase exceeding 8%. Meanwhile, imports saw a decrease of 3.9% year-over-year, indicating weak consumer and industrial demand.
Despite the dip in imports, China’s trade surplus expanded to $97.4 billion. This update followed an announcement from Beijing a day earlier, indicating intentions to ease monetary policy and enhance support for the country’s economy, which stands as the second largest globally.
Amidst this economic landscape, U.S. President-elect Donald Trump has voiced intentions of implementing tariffs ranging from 60% or more on Chinese imports, creating an additional challenge for Beijing’s economic strategy, especially as the property sector falters and consumer expenditure remains tepid.
Some experts believe that the current challenges may be transient. Zichun Huang from Capital Economics commented, “We anticipate exports will rebound in the upcoming months, driven by improvements in export competitiveness and exporters preempting tariff hikes.” She added, “Although import volumes decreased last month, they are expected to recover soon as increased fiscal spending stimulates demand for industrial materials.” The full impact of tariffs is not anticipated to unfold until around mid-2025, Huang noted.
Exports to the United States saw an increase of 8% in November compared to the same period last year, while shipments to the European Union rose by 7.2%. However, exports to Russia fell by 2.6% year-on-year, a stark contrast to the previous month’s increase of 27%. This decline follows the imposition of secondary sanctions by the U.S. on goods identified as supporting Russia’s military activities, affecting certain Chinese companies accused of aiding in the circumvention of these sanctions.
In a further indication of slack demand, consumer inflation in November was recorded at a lower-than-expected 0.2%, as reported on Monday, down from 0.3% in October, primarily due to reduced food prices. Conversely, an official survey conducted by the National Bureau of Statistics revealed that China’s factory activity expanded for a second successive month in November, reaching a figure of 50.3, which is the highest in seven months. A reading above 50 signifies growth, while a reading below indicates contraction. Analysts suggest that the uptick in factory orders might also be a strategy to circumvent impending higher tariffs.
