China’s exports rose for the first time in five months in December and by more than expected, signaling a modest recovery in demand as Beijing and Washington agreed to defuse their prolonged trade war, Reuters writes.
The world’s largest economies are set to sign a Phase 1 trade deal on Wednesday, marking a significant de-escalation but not an end to a dispute that has rattled financial markets and threatened to derail global economic growth.
After a rough year, China’s exports ended 2019 on an upbeat note, rising 7.6% in December from a year earlier, customs data showed on Tuesday. The median forecast from a Reuters poll of analysts had been for a 3.2% rise in shipments, following November’s 1.3% drop.
Imports also beat expectations, jumping 16.3% from a year earlier, though boosted in part by higher commodity prices. The Reuters poll had forecast 9.6% growth versus 0.5% in November.
While comparisons with a weak December last year flattered both figures, they also pointed to improving demand, both globally and within China, analysts said.
China posted a trade surplus of $46.79 billion in December, compared with the poll’s forecast for a $48 billion surplus and up from November’s surplus of $37.93 billion.
For all of 2019, its total exports proved remarkably resilient to trade tensions, rising 0.5%, though that was well off a near 10% gain in 2018, reflecting weaker U.S. sales.
Imports fell 2.8% last year as China’s economic growth cooled to near 30-year lows, after rising 15.8% in 2018.
China’s better-than-expected trade numbers come amid a flurry of trust-building gestures from both sides ahead of the signing of the Phase 1 deal.
The U.S. Treasury Department said on Monday China should no longer be designated a currency manipulator – a label it applied as the yuan currency dropped in August.
On Tuesday, China’s customs vice minister Zou Zhiwu told a briefing that its soybean and pork imports from the U.S. rebounded significantly in December and positive trade sentiment has boosted companies’ confidence.
But overall growth in imports from the U.S. saw less of an pick-up than shipments from other countries in December, analysts from Capital Economics said in a note.