China's Export Slowdown

BEIJING (Reuters) – China's exports grew at a slower pace in November than in the previous month, raising concerns for the world's second-largest economy as Donald Trump’s upcoming presidency poses new trade risks.

U.S. President-elect Trump has announced plans to impose an additional 10% tariff on Chinese goods, aiming to pressure Beijing into actions against the trafficking of fentanyl precursors. This is part of a broader strategy, as he had previously proposed tariffs exceeding 60% on Chinese imports.

Meanwhile, unresolved tensions between China and the European Union regarding tariffs of up to 45.3% on China-made electric vehicles add to the pressure on Beijing in its trade relations with the West.

According to customs data released Tuesday, outbound shipments from China rose 6.7% year-on-year last month, falling short of an 8.5% increase projected in a Reuters poll and significantly lower than October’s 12.7% rise.

In contrast, imports unexpectedly shrank by 3.9%, diverging from expectations of a 0.3% increase and reflecting a 2.3% decline in October. China's trade surplus grew to $97.44 billion in November, an increase from $95.72 billion the previous month.

Export momentum had been a rare positive indication for an economy struggling with weak household and business confidence amid a prolonged property market crisis. Recent reports suggested some signs of stimulus had begun to manifest, with manufacturers noting the best business conditions in seven months.

However, export orders remained low, indicative of a challenging global economic environment. In November, South Korea's exports also dwindled, marking the weakest performance in 14 months, with outbound shipments to China declining for the first time in eight months, suggesting reduced demand for Korean components.

In light of expected U.S. tariff increases, Chinese government advisors are advocating for robust fiscal stimulus to cushion the impact on exports, while aiming for an economic growth target of approximately 5.0% for the next year. Key policymakers are set to convene this week to outline priorities, with investors eager for signals of support towards local governments and the property sector from the Politburo.