China’s trade data for November showed a surprising decline in imports and a slowdown in exports, raising concerns over the nation’s economic health as sluggish consumer demand and potential tariff threats loom. According to data released by China’s customs authority, imports fell by 3.9% in November, marking the sharpest drop since September 2023. This was a stark contrast to analysts’ expectations of a modest 0.3% growth. Meanwhile, exports increased by 6.7% in U.S. dollar terms, a notable slowdown from the 12.7% growth recorded in the previous month and below the anticipated 8.5% rise.
Despite the decline in exports, Zichun Huang, China economist at Capital Economics, noted that this does not signify the end of China’s recent export boom. He explained that U.S. tariffs could potentially reduce export volumes by approximately 3%, but their full impact may not be felt until mid-2025. In the short term, Huang suggested that tariff threats might even spur exports as U.S. firms place more orders ahead of potential tariff hikes.
The data also showed that exports to China’s major trading partners— the United States, the European Union, and the Association of Southeast Asian Nations (ASEAN)—all increased in November. Exports to ASEAN countries rose by nearly 15%, marking the largest gain, while imports from ASEAN dropped by 3%. Exports to the U.S. rose by 8%, while imports from the U.S. fell by over 11%. Exports to the EU increased by 7.2%, and imports from the EU shrank by 6.5%.
China’s exports of rare earths, crucial for electric vehicles and consumer electronics, rose nearly 5%, while imports of rare earths declined over 20%. The country’s steel exports surged by 16% year-on-year, reaching 9.28 million tons in November. Steel exports are expected to exceed 100 million tons for the year, a level last seen in 2016.
Despite the drop in imports, analysts remain hopeful that fiscal stimulus and policy adjustments by the Chinese government could help stimulate domestic demand. On the back of this trade data, China’s leadership has pledged to increase monetary and fiscal stimulus in 2025 to boost growth and domestic consumption. However, sluggish domestic demand remains a challenge, with consumer inflation falling to a five-month low in November.
This latest trade data comes as manufacturing activity expanded for the second consecutive month in November, aided by stimulus measures. However, the broader economic recovery remains bumpy, with weak domestic consumption continuing to dampen overall growth.
