China's December exports beat forecasts

BEIJING •China's exports rose for the first time in five months last month and by more than expected, signalling a modest recovery in demand as Beijing and Washington agreed to defuse their prolonged trade war.

The world's largest economies are set to sign a phase one trade deal today, marking a significant de-escalation but not an end to a dispute that has rattled financial markets and weighed heavily on global business confidence.

China's December exports rose 7.6 per cent from a year earlier, Customs data showed yesterday. The median forecast from a Reuters poll of analysts had been for a 3.2 per cent rise in shipments, following November's 1.3 per cent drop.

Imports also surpassed expectations, jumping 16.3 per cent from a year earlier and boosted in part by higher commodity prices. The Reuters poll had forecast 9.6 per cent growth versus 0.5 per cent in November.

The data also showed China's politically sensitive trade surplus with the United States narrowed last year. The perennial US trade deficit with China has been a major source of anger for US President Donald Trump, who has slapped tariffs on hundreds of billions of dollars worth of Chinese goods, triggering tit-for-tat responses from Beijing.

China posted a trade surplus of US$46.79 billion (S$63 billion) last month, compared with the poll's forecast for a US$48 billion surplus, up from November's surplus of US$37.93 billion.

For all of last year, its exports proved remarkably resilient to trade tensions, rising 0.5 per cent, while imports fell 2.8 per cent.

China's trade surplus with the US for last month stood at US$23.18 billion, according to Reuters calculations based on Customs data, down from November's surplus of US$24.60 billion.

China exports to the US fell 12.5 per cent last year, compared with a rise of 11.3 per cent in 2018. Imports from the US fell 20.9 per cent, versus a 0.7 per cent rise in the previous year.

Overall sentiment improved last month after the two sides reached the phase one deal, which is expected to cut tariffs and boost Chinese purchases of US farm, energy and manufactured goods, while addressing some disputes over intellectual property.

However, analysts say the deal does not spell the end of trade tensions and the risk of further complications and re-escalation remains.

REUTERS, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on January 15, 2020, with the headline 'China's December exports beat forecasts'. Print Edition | Subscribe