Anticipated trade war overshadows China’s record-breaking exports in 2024

China’s total exports achieved an all-time high in 2024 with $3.47 trillion, raising concerns over the possible impacts of U.S. President-elect Donald Trump’s pledged tariffs and thus prioritizing the significance of a focus on increasing domestic demand, according to the analysts.

Overseas shipments represented a rare bright spot for Beijing in 2024 as sluggish domestic consumption and a prolonged crisis in the property sector dragged on growth.

But Trump, who imposed sweeping tariffs on China during his first term in office, has threatened even heftier levies when he returns to the White House next week.

Observers said that a recent surge in China’s exports has likely been boosted by companies ramping up stockpiles ahead of Trump’s second term amid fears of a painful trade war.

“In 2024, China’s total exports exceeded 25 trillion yuan for the first time, reaching 25.45 trillion yuan ($3.47 trillion), an increase of 7.1% year-on-year,” Lu Daliang, spokesman for the General Administration of Customs, said at a news conference. Total imports, meanwhile, rose 2.3% to 18.39 trillion yuan, Lu said.

Combined trade swelled 5% to reach a record 43.85 trillion yuan, said Wang Lingjun, vice minister of the customs administration. “China’s position as the world’s largest goods trading nation has become even more secure,” Wang added.

Official customs data showed Monday that exports in December jumped 10.7% year-on-year, comfortably outperforming a forecast of 7.5% in a Bloomberg survey of economists.

“We expect shipments to remain strong in the coming months as U.S. importers continue to stockpile Chinese goods ahead of tariff hikes,” Zichun Huang, China economist at Capital Economics, wrote in a note.

“But exports are likely to weaken later this year as President Trump puts his tariff threats into action,” she added.

Imports last month grew 1% year-on-year, customs data showed, compared with a Bloomberg forecast of a 1% decline.

China’s first target in 2025: Pumping domestic demand

Exports have historically represented a key driver of activity for the world’s number two economy, which officials say is likely to have grown 5% in 2024. During the most recent U.S. presidential campaign, Trump threatened to slap a 60% tariff on all Chinese goods.

China’s exports “are likely to stay resilient in the near term,” wrote Huang. “But outbound shipments will weaken later this year if Trump follows through,” she wrote, adding that the new US tariffs “could reduce export volumes by about 3% and shave roughly 0.5% off China’s gross domestic product (GDP).”

Since September, Beijing has announced some of its most aggressive policy measures in years as officials try to kickstart the economy, which has so far failed to achieve a full post-pandemic recovery.

The steps have included the cancellation of certain restrictions on homebuying, subsidies for the purchasing of household items, and key interest rate cuts. Exports have historically represented a key driver of activity for the world’s number two economy, which officials say is likely to have grown 5% last year.

“With the help of strong exports and macro policy easing, the economic momentum likely stabilized,” wrote Zhiwei Zhang, chief economist at Pinpoint Asset Management, in a note Monday following the publication of the trade figures.

The government is because of the release of 2024 economic growth data later this week. President Xi Jinping has recently expressed confidence that the country achieved an official target of around 5%.

Many economists say more policy support targeted at incentivizing domestic consumption is needed to restore China’s economic health. The country narrowly avoided a slip into deflation in December, official figures showed last week, suggesting that recent measures have not yet produced a robust rebound in domestic spending.

Low inflation may lead to an increase in real interest rates, said Yue Su, principal economist at the Economist Intelligence Unit. “So monetary easing policy needs to be more proactive to reduce the borrowing cost of enterprises, which is important for a broad recovery of the economy,” she told Agence France-Presse (AFP).

The International Monetary Fund (IMF) has previously predicted China’s economy would grow 4.8% in 2024 before slowing to 4.5% this year.