China’s exports rose 0.5% in 2019 despite a tariff war with Washington after growth rebounded in December on stronger demand from other markets.
Exports to the United States fell 12.5% compared with 2018 after a 14.5% contraction in December, customs data showed Tuesday. The impact of President Donald Trump’s tariff hikes on Chinese goods has been smaller than many forecasters expected. Famously resilient Chinese exporters have aggressively pursued other markets, stepping up sales to Asia, Europe and Africa.
China’s global exports rose 7.8% in December over a year earlier, rebounding from a 1.1% contraction in November. Imports surged 16.3%. U.S. and Chinese envoys are due to sign an interim trade agreement this week that investors hope will be a first step toward ending the tariff war over Beijing’s technology ambitions and trade surplus that threatens global economic growth.
“Slow global trade will continue to challenge China’s external outlook in the near term. But the ‘Phase 1’ trade deal with the U.S. will have a favorable impact,” said Tommy Wu of Oxford Economics in a report.
Under the deal, Washington postponed planned tariff hikes and Beijing agreed to buy more American farm exports. Economists warn the agreement fails to address contentious disputes that might take years to resolve.
“The risk of relations deteriorating again and tariffs ‘snapping back’ is substantial against a background of tension and mistrust,” Wu said.
Forecasters also cautioned that December’s numbers were less rosy than they appeared because the robust-looking growth was due to comparison with 2018, when the tariff war was depressing trade.
“While the outlook for exports is improving, domestic demand will remain subdued,” said Julian Evans-Pritchard and Martin Rasmussen of Capital Economics in a report.
December marked the first month since July with positive Chinese trade growth. China reported double-digit growth in 2019 exports to France, Canada, Australia, Brazil and Southeast Asia.