BEIJING, China, Jan 13 – Chinese exports fell more than expected in December, data showed Friday, deepening concerns about the trade outlook for the world’s number-two economy as Donald Trump prepares to take office.
The disappointing figures come as the country tries to position itself as a leader of the global trade regime in anticipation of an American retreat under its proudly protectionist new leader.
The world’s largest trader in goods, China’s performance affects partners from Australia to Zambia, which have been battered as its expansion has slowed to levels not seen in a quarter of a century.
“There remain some obstacles facing China’s foreign trade development,” Customs spokesman Huang Songping told reporters at a news conference announcing the results, adding the international trading environment was “severe and complex”.
Exports slipped 6.1 percent to $209.4 billion in December, Customs said, much worse than the four percent tipped in a survey by Bloomberg News.
Imports were essentially in line with expectations, rising 3.1 percent to $168.6 billion, while the trade surplus dropped nearly a third year-on-year to $40.8 billion.
Figures for the whole year showed an even sharper decline, with exports down 7.7 percent to $2.1 trillion, and imports dropping 5.5 percent to $1.59 trillion.
It had earlier released the figures in yuan terms, showing a 2.0 percent drop in exports last year.
Next week sees the release of economic growth data for the whole year. On Monday the country’s top economic planner Xu Shaoshi said he expected to see growth of about 6.7 percent, matching forecasts and government targets but marking the worst result in more than a quarter of a century.
Bracing for Trump
The yuan’s recent slide against the dollar to eight-year lows helped lift exports in November, but the outlook for this year is shaky after Trump threatened to label China a currency manipulator and slap punitive tariffs on its goods.
The renewed exports slump came despite signs of recovering global demand at the end of last year, a trend reflected by positive trade data in Taiwan and South Korea, Julian Evans-Pritchard of Capital Economics said in a note.
It is concerning “given that the current environment of rising prices and relatively buoyant global manufacturing growth ought to have been supportive of Chinese trade values,” he said.
And 2017 offers more downside risks as Trump has appointed hardliners to handle trade policy, he said.
The billionaire businessman’s pick of outspoken China critic Peter Navarro to head the White House National Trade Council has alarmed Beijing. He has written books such as “Death by China” that accuse the country of waging economic war by subsidising its manufacturing industry and blocking American imports.
Trade policy under Trump is likely to motivate US businesses to move their factories out of China, adding “long-term structural weakness” to Chinese exports, analysts with ANZ Research said in a note.
Next week Chinese President Xi Jinping will head to the World Economic Forum at Davos to defend globalisation and is expected to put forth his vision for the world economy in an era of rising protectionism.
But analysts doubt the country is ready to take the US’s place.
The global trade regime has been built around US demand and its large deficits with trade partners; China consistently runs huge trade surpluses with the US and other countries as the workshop of the world — a mainstay of the decades-long boom that has propelled its rise to the world’s second-largest economy.
In 2016, its trade surplus reached $510 billion in dollar terms, Customs data showed.
Chinese stocks fell Friday, with the benchmark Shanghai Composite Index off 0.21 percent.