China posts higher-than-expected exports growth in December

BEIJING — China’s exports rose more than expected in December, but failed to offset an overall decline for 2023, customs data showed Friday.

Exports rose by 2.3% year on year in U.S. dollar terms last month, more than the 1.7% increase forecast by a Reuters poll.

For 2023, exports fell 4.6% while imports dropped 5.5%, according to customs data.

Imports rose by 0.2% in December from a year earlier in U.S. dollar terms. That’s slightly less than the 0.3% increase expected by analysts polled by Reuters.

Demand for Chinese goods has fallen amid slower global growth, and the country’s trade with its major partners declined in 2023.

The Association of Southeast Asian Nations was China’s largest trading partner on a regional basis in 2023, followed by the European Union.

Among countries, the U.S. remained China’s largest trading partner.

Russia was a rare bright spot, with China’s exports to the country climbing nearly 47% in 2023, and imports rising almost 13%.

“Chinese manufacturers anticipate production to rise over the course of 2024 amid forecasts of firmer global demand, higher client spending and new product investment,” Caixin said in a release for its December manufacturing purchasing managers’ index.

The index showed mild improvement from November. “However, the degree of optimism softened from November and remained below the series average.”

The report also noted a decline in the employment sub-index. “Firms often mentioned that they had opted not to replace voluntary leavers or trimmed headcounts as demand was more subdued than expected,” the Caixin analysis said.

“Our base case is for exports to rise 2% in 2024 after falling 5% [in 2023]. If exports slow more than expected, policymakers would turn more proactive in terms of domestic policy supports,” Macquarie’s Chief China Economist Larry Hu said in a Jan. 5 report.

Autos have been a bright spot in China’s recent trade data. The country is expected to have surpassed Japan as the world’s largest exporter of cars in 2023.

Rapid growth in the electric car market as well as demand from Russia have helped boost China’s auto exports, said Sarah Tan, economist at Moody’s Analytics.

“After Russia’s invasion of Ukraine in February 2022, many auto manufacturers had left the country only to have that gap filled by Chinese manufacturers,” she said in an email. “In the first eleven months of 2023, auto shipments to Russia rose about six times that of 2022 in value terms.”