China's Export Trends in November

By Liz Lee and Joe Cash

BEIJING (Reuters) – China's exports likely grew in November, albeit at a slower pace than last month's substantial figures, maintaining an optimistic trend as exporters probably frontloaded shipments amid rising tariff concerns from the forthcoming U.S. administration.

Outbound shipments are expected to have increased by 8.5% year-on-year in November, according to the median forecast from 22 economists in a Reuters poll. This compares to a 12.7% jump in October.

Imports are likely to have increased slightly by 0.3%, marking a return to positive territory after a 2.3% drop in October.

The forecast indicates another month of robust trade data to be released on Tuesday, defying a broader slowdown in global demand.

China's $19-trillion economy likely experienced a rise in imports due to sustained demand for chipmaking equipment spurred by U.S. chip curbs.

Meanwhile, South Korea, a key indicator of China's imports, recorded a fourth consecutive month of declining export growth in November, hitting a 14-month low, with shipments to the U.S. and China falling amid tariff uncertainties.

Economists anticipate that Chinese exporters have been frontloading shipments in anticipation of increased tariffs when U.S. President-elect Donald Trump takes office. U.S. manufacturers are also frontloading imports to mitigate expected cost pressures.

Trump has indicated a potential 10% increase in tariffs on Chinese goods, following his campaign vow to impose tariffs exceeding 60%.

Even before Trump's election, analysts believed Chinese factories were reducing prices to attract orders while preparing for tariff risks posed by their largest trading partner.

Unresolved trade tensions with the European Union, particularly concerning tariffs of up to 45.3% on China-made electric vehicles, threaten to escalate Beijing's trade challenges with the West.

China's factory activity showed modest expansion for the second consecutive month in November, according to an official survey, with manufacturers reporting the best business conditions in seven months. This signals a potential uptick in exports, as estimated by Barclays Research.

Strong export performance has been a positive aspect amid China's shaky economy, which grapples with weak domestic demand and a prolonged property market crisis.

To support the economy, the government has rolled out stimulus measures, including a 10 trillion yuan ($1.4 trillion) debt package last month aimed at stabilizing the finances of local governments and property developers.

Further stimulus measures are anticipated, although no specific details about their scale or timing have been revealed.

Government advisors are advocating for more stimulus in advance of the upcoming closed-door annual Central Economic Work Conference, where top leaders will discuss policies and goals for 2025. There is growing caution against becoming overly reliant on exports for economic growth.

China's November trade surplus is projected at $95 billion, a slight decrease from $95.72 billion in October.