China’s exports in November massively beat expectations on U.S. trade truce

China’s exports largely beat market expectations in November as manufacturers began shipping stocks following a trade deal with Washington following a meeting between the leaders of the world’s two largest economies.

Outbound shipments rose 5.9% in U.S. dollar terms in November from a year earlier, China’s customs data showed on Monday, above economists’ forecasts for 3.8% growth in a Reuters poll. This growth marked a recovery from an unexpected 1.1% decline in October, the first contraction since March 2024.

However, the 1.9 percent import growth missed the expectations of a 3 percent increase. Commitments to increase imports renewed and is working to balance trade amid widespread criticism of its aggressive exports.

Imports increased by only 1% in October compared to the previous year, as the prolonged housing crisis and increasing job insecurity continued to negatively affect domestic consumption.

Chinese manufacturers breathed a sigh of relief after Chinese leader Xi Jinping and the US President agreed to suspend a number of restrictive measures for a year during their meeting in South Korea in late October.

The two parties agreed Rolling back high tariffs They have export controls and advanced technology on each other’s goods, with Beijing pledging to buy more American soybeans and working with Washington to stem the flow of fentanyl.

After the ceasefire, US duties on Chinese goods remained around 47.5% According to the Peterson Institute for International Economics. Beijing’s customs duties on imports from the USA are around 32 percent

China’s factory activity contracted for an eighth straight month in November, and new orders continued to contract, according to an official manufacturing survey. A special survey focusing on exporters showed that manufacturing activity began to contract unexpectedly.

Chinese policymakers are expected to meet for the annual Central Economic Work Conference later this month to discuss economic growth target, budget and policy priorities for next year. Specific targets will not be officially announced until the “Two Sessions” meeting in March next year.

According to Goldman Sachs, Beijing is expected to keep its 2026 growth target unchanged at “around 5 percent”; This will require gradual policy easing early next year to ensure growth accelerates after a possible weak reading in the fourth quarter of 2025.

The Wall Street bank expects Chinese officials to lift the soaring fiscal deficit ceiling by 1 percentage point of GDP, cut policy rates by a total of 20 basis points and increase stimulus measures to rein in the housing slump.

The yuan, which has been strengthening in recent weeks, does not seem to stop China’s export flow. The offshore yuan had strengthened nearly 5% since April to 7.0669 per dollar at market open on Monday, LSEG data showed.

Weijian Shan, managing director of private equity firm PAG, said that despite a steady 5 percent annual GDP growth since 2023, China “must urgently reduce its dependence on exports and turn to domestic consumption to achieve sustainable growth.” an opinion piece last month.

Shan added that a stronger yuan could increase the contribution of consumption to economic growth from 53% currently to 86% in 2023, as it would reduce import costs and increase households’ purchasing power.

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