BEIJING: China’s exports grew at a slower pace in November than the bumper month before, while imports unexpectedly shrank, in a worrying sign for the world’s No 2 economy as Donald Trump’s imminent return to the White House brings fresh trade risks.
US President-elect Trump has pledged to slap an additional 10 per cent tariff on Chinese goods in a bid to force Beijing to do more to stop the trafficking of chemicals used to make fentanyl.
Outbound shipments grew just 6.7 per cent last month, customs data showed on Tuesday (Dec 10), missing an 8.5 per cent increase in a Reuters poll of economists and a 12.7 per cent rise in October.
More worryingly, imports shrank 3.9 per cent, their worst performance in nine months and dashing expectations for a 0.3 per cent increase, keeping alive calls for more policy support to prop up domestic demand.
Trump has previously said he would introduce tariffs in excess of 60 per cent on Chinese goods.
Meanwhile, unresolved tensions with the European Union over tariffs of up to 45.3 per cent on China-made electric vehicles threaten to open a second front in Beijing’s trade war with the West.
US tariff hikes pose a bigger threat to China this time around as the US$19 trillion-dollar economy’s exports are one of its main growth drivers, with household and business confidence dented by a prolonged property crisis.
Government advisors are recommending that Beijing keeps its growth target unchanged at around 5 per cent next year and implements more forceful stimulus to mitigate the expected US tariffs by leaning on the country’s vast domestic consumer market.
“Global demand is not super strong, data from other major exporters like South Korea and Vietnam point to different levels of slowdown too,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.
“Early signs of trade frontloading in anticipation of Trump’s tariffs next year have started to emerge, but the full impact will not be felt until the coming months, especially December and January,” he added.
China’s trade surplus grew to US$97.44 billion last month, up from US$95.72 billion in October.
Xing Zhaopeng, senior China strategist at ANZ, attributed the poor import figure to falling commodity prices.
The world’s top crude buyer took in 48.52 million metric tons last month, up an annual 14.3 per cent, as lower prices of Middle East supplies and stockpiling demand boosted buying.
China’s coal imports rose 26 per cent year-on-year in November, a record high, as imported supply was cheaper than domestic coal.
Meanwhile, copper imports hit a one-year high, fuelled by shipments from Africa and purchases to restock domestic inventories of the key construction material, in an encouraging nod to an improving property sector.
The economy had recently seen some signs of stimulus trickling through, with manufacturers reporting the best business conditions in seven months in a November factory survey.
Firms said they were still receiving fewer export orders, however, suggesting buyers remain hard to come by in a slowing global economy and exporters are moving stocks to warehouses abroad in anticipation of demand picking up again.
South Korea’s exports, a leading indicator of China’s imports, slowed to the weakest level in 14 months in November.
Outbound Korean shipments to China fell for the first time in eight months, pointing to Chinese manufacturers buying in fewer Korean components for re-export in finished electronics goods.
Top policymakers are expected to meet this week to set out their priorities for the coming year. Investors will be looking for fresh policy support to local governments and the property sector from the Politburo.
