China's Trade Performance Falls Short of Expectations in November

A foreign trade container ship is leaving the dock at Qingdao Port in Qingdao, China, on June 7, 2024.

Costfoto | Nurphoto | Getty Images

China's foreign trade figures for November revealed a mix of results, as both exports and imports fell short of analysts' predictions. According to the customs authority, exports rose by 6.7% in U.S. dollar terms, while imports decreased by 3.9% compared to the same period last year.

These export numbers did not meet expectations, as forecasts had anticipated an 8.5% year-on-year growth. However, it is worth noting that exports had shown a strong performance in October, increasing by 12.7%, which was the highest growth rate since March 2023, based on data from LSEG.

The import figures were particularly unexpected, with a 3.9% decline when analysts had forecasted a modest rise of 0.3%.

For the year to date, total exports in U.S. dollar terms stood at $3.24 trillion, reflecting a 5.4% increase, while imports rose by just 1.2%, reaching $2.36 trillion. These statistics underscore the challenges faced by China's economy, which has been grappling with weak domestic consumption and a continual housing market slump.

The disappointing trade data was released shortly after China's leadership announced intentions to enhance monetary and fiscal policies to encourage growth in the upcoming year, with promises of unconventional adjustments aimed at boosting domestic demand.

Despite the current challenges, export growth is expected to remain strong as we move into early 2025. Erica Tay, director of macro research at Maybank, noted that U.S. importers are likely to continue front-loading purchases from China. However, she cautioned that there may be a decline in the latter half of the year as U.S. tariffs begin to impact trade.

On a positive note, manufacturing activity in China saw improvement for the second consecutive month in November, with the official purchasing managers' index climbing to 50.3. This growth has been attributed to existing stimulus measures from the Beijing government, which have helped in revitalizing certain sectors of the struggling economy.

However, internal demand remains weak. Consumer inflation in China experienced a decline, reaching a five-month low in November, with a slight increase of just 0.2% compared to the previous year, according to official data revealed earlier this week.

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exports, imports, economy