Chinese imports recorded a surprising jump in December, exports exceeded expectations

China’s December trade data came in well ahead of expectations, with exporters continuing to increase shipments as concerns over additional tariffs grow, while the country’s stimulus measures appear to be supporting demand in the industrial sector.

Exports jumped 10.7% in US dollars in December compared to a year earlier, data from China the customs administration showed Mondaybeating expectations for 7.3% growth in a Reuters poll. That compares with a 6.7% rise in November and a 12.7% jump in October.

Customs data showed imports rose 1.0% last month from a year earlier, reversing declines in the previous two months. Analysts predicted a drop in imports of 1.5% on an annual basis. It is compared to a larger decline than the 3.9% in November and 2.3 percent in October.

Last year, China’s total yuan-denominated exports jumped 7.1% year-on-year, accelerating from modest growth of 0.6% in 2023customs officers said at a press conference on Monday.

Last year, Chinese imports grew by 2.3%, rising from a decrease of 0.3% in 2023.

“Outbound shipments are likely to remain resilient in the short term, supported by further gains in global market share,” Zichun Huang, China economist at Capital Economics, said in a note, thanks to the weak yuan.

The outlook for exports for the full year, however, appears less optimistic, as “a potential tariff increase could dampen momentum,” said Bruce Pang, a distinguished senior fellow at the National Institute for Finance and Development.

“In the short term, import volumes are also expected to recover further, driven by stronger demand for industrial goods, with accelerated fiscal spending,” Pang added.

Domestic demand in China has been hit by a prolonged housing crisis, making the country more reliant on exports to fuel its growth.

Economists expect that exports will have significantly supported China’s economic growth last year. Full-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 threatened once US President-elect Donald Trump returns to the White House.

This year, China will need to focus more on boosting domestic demand as external momentum fades, Gary Ng, senior economist at Natixis, said in an email to CNBC. “China’s deflationary pressure in the manufacturing sector could continue to fuel new geopolitical tensions,” he added.

Weak consumer sentiment, an uneven recovery in real estate and tepid growth in local government infrastructure projects continue to slow the recovery in domestic demand, Ng said.

In December, shipments to most markets rose, with double-digit increases to the Association of Southeast Asian Nations and the US, where exports rose 18.9% and 15.6%, respectively, from a year earlier, according to CNBC’s calculations of official customs data.

US imports rose 2.6% in December, and ASEAN — China’s largest trading partner — rose 5.4%.

Exports to the European Union increased by 8.76 percent, while imports fell by 4.9 percent. The country’s exports to the BRICS partner group Russia increased by 5.5%, while imports fell by 4.7%.

Last year, China’s exports of electric vehicles and semiconductors increased by 13.1% and 18.7% respectively last yearcustoms officials say.

Meanwhile, the country’s steel exports hit their highest level since 2015, with shipments of 110.7 million tonnes, as the country sought to offset weak domestic demand due to an asset crisis and a slowdown in manufacturing activity.

Trump – who is due to take office on January 20 – fueled fears of higher tariffs on Chinese exports. He has promised an additional 10% tariffs on all Chinese goods entering the US

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

China has reduce interest rateslaid back restrictions on the purchase of real estateinjected liquidity into the financial market as well presented a debt replacement program in order to alleviate the fiscal pressure of local authorities.

“While top leaders recognize the need to boost real GDP growth, Xi still appears reluctant to accept the additional degree of stimulus needed to fight deflation,” Wildau added.

“Policymakers need to keep some stimulus powder dry to allow for a sufficient response if the impact of tariffs is severe,” he said, suggesting that uncertainty over export growth creates additional reason for Beijing to avoid a “big bang approach.”

Among a raft of key economic data available this week, China will release full-year GDP data on Friday, as well as fourth-quarter GDP data. According to a Reuters poll, growth is pegged at 5.1% year-on-year in the last quarter of 2024.

For this year, the top leadership promised reinforcements domestic consumption the main priority at the same time increasing fiscal spending to finance the policy of replacing consumer goods and upgrading equipment. Launched in July last yearthe exchange program subsidizes consumers on trade in old cars or household appliances and buy new ones at a discount.