Investing.com-- China’s trade balance grew more than expected in December, aided by an outsized rise in exports as foreign demand improved, while the country’s imports continued to lag.
China’s trade balance grew to $75.34 billion in December, data from the Customs Bureau showed on Friday. The reading was higher than expectations for a surplus of $74.75 billion, and also improved from the $68.39 billion seen in the prior month.
The improved trade surplus was driven chiefly by a bigger-than-expected rise in exports. Chinese exports grew 2.3% year-on-year in December, beating expectations of 1.7% and improving substantially from the 0.5% rise seen in November.
The reading came as Chinese businesses saw some recovery in overseas demand, particularly in Europe and Asia. Demand in the country’s biggest export destinations now appeared to be stabilizing as the effects of high interest rates and inflation were baked into the global economy.
The stronger trade surplus was also driven by a smaller-than-expected rise in imports, which grew 0.2% year-on-year, against expectations for a rise of 0.3%. But imports also improved from a 0.6% decline in the prior month, indicating that local demand was picking up marginally after remaining weak for most of 2023.
Friday’s trade data showed some green shoots in the Chinese economy, after a post-COVID economic recovery largely failed to materialize in 2023.
Inflation data released earlier in the day also showed some pick-up in consumer spending.
But the Chinese government faces an uphill battle in shoring up economic growth, given that Beijing has remained largely conservative in rolling out more fiscal support for the economy.
This trend kept domestic demand weak, with soft overseas demand adding to pressure on the Chinese economy.
Focus is now on gross domestic product data for the December quarter, which will also provide Chinese growth figures for 2023. The country is expected to have met its 5% annual growth target.