The gloomy December export and import numbers from China
suggest that the world’s biggest trading nation has been hit by the global economic slowdown as well as the China-U.S. trade war. While annual Chinese exports rose by almost ten percent and imports increased by 16 percent in 2018, the last two months’ data showed a clear downward trend.
The unexpected exports drop to 221.25 billion U.S. dollars in December, down 4.4. percent from the same month in 2017, was the worst result since December 2016. According to Bloomberg
, analysts had been forecasting a two percent rise in exports instead.
Chinese imports fell to 164.19 billion U.S. dollars last month, a drop of 7.6 percent compared to December 2017 instead of the forecasted 4.5 percent increase. The drop in imports was the biggest since July 2016 and is hinting at a weakening domestic demand.
While the uncertainty linked to the trade conflict and tariffs between China and the U.S. are clearly showing a negative impact on China’s trade figures, the momentary recession might as well be a result of both weaker global demand and the domestic economic slowdown in China.
Although we can expect trade volumes to pick up later this month right before the Lunar New Year, the annual growth rate of Chinese exports and imports is likely to decline in 2019.