BEIJING (Reuters) – 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.
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 weighed heavily on global business confidence.
China’s December exports rose 7.6% 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 surpassed expectations, jumping 16.3% from a year earlier and 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 in 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, up from November’s surplus of $37.93 billion.
For all of 2019, its exports proved remarkably resilient to trade tensions, rising 0.5%, while imports fell 2.8%.
China’s trade surplus with the United States for December stood at $23.18 billion, according to Reuters calculations based on customs data, down from November’s surplus of $24.60 billion.
China exports to the United States fell 12.5% in 2019, compared with a rise of 11.3% in 2018. Imports from the United States fell 20.9%, versus a 0.7% rise in the previous year.
Overall sentiment improved last month after the two sides reached the Phase 1 deal, which is expected to cut tariffs and boost Chinese purchases of U.S. farm, energy and manufactured goods while addressing some disputes over intellectual property.
- China's 2019 annual crude imports set record for 17th year
- China's December soybean imports surge on year as cargoes clear customs
China’s Vice Premier Liu He is in Washington from Jan. 13-15 to sign the interim agreement.
However, analysts say the deal does not spell the end of trade tensions and the risk of further complications and re-escalation remains.
“Our judgment is Phase 1 will not put an end to Trump Trade Wars,” analysts with MUFG Bank wrote in a research note prior to the data.
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