China’s economic recovery faltered in November as exports slowed sharply and imports unexpectedly contracted, signaling potential trouble for the world’s second-largest economy. The downturn comes as former U.S. President Donald Trump prepares to return to the White House in 2025, raising fears of renewed trade tensions and fresh tariffs on Chinese goods.
The latest customs data reveals a grim picture: outbound shipments rose only 6.7% year-on-year in November, well below the forecasted 8.5% increase and a significant drop from October’s 12.7% growth. Meanwhile, imports fell by 3.9%, marking their steepest decline in nine months and defying expectations of a modest 0.3% rise.
These figures point to weak domestic demand and underline the need for Beijing to introduce stronger policy measures to stabilize the economy, which is already grappling with challenges like sluggish consumer spending and an ongoing property crisis.
The slowdown in exports reflects weakening global demand, a factor that has also impacted other major exporters like South Korea and Vietnam. According to Xu Tianchen, a senior economist at the Economist Intelligence Unit, the subdued growth in global markets is a major contributing factor.
“Early signs of trade frontloading in anticipation of Trump’s tariffs next year have started to emerge,” said Xu. “However, the full impact will not be felt until the coming months, particularly in December and January.”
President-elect Trump’s promise to impose additional tariffs of 10% on Chinese goods, citing Beijing’s failure to curb the trafficking of fentanyl precursors, has added to the uncertainty. Trump has even hinted at tariffs exceeding 60%, raising the stakes for China’s industrial sector, which depends heavily on U.S. markets.
In October, many Chinese exporters rushed to ship goods to the U.S., anticipating potential tariff hikes. While this trend slowed in November, experts believe frontloading activity may provide short-term support to exports in the coming months.
“We expect exports to accelerate again, driven by gains in export competitiveness and efforts to front-run tariffs,” said Zichun Huang, China economist at Capital Economics.
However, unresolved trade disputes with the European Union, including proposed tariffs of up to 45.3% on Chinese-made electric vehicles, pose additional risks. These tensions could create a second trade front for Beijing, compounding the challenges posed by U.S. policies.
Domestically, the sharp decline in imports highlights weak consumer and industrial demand, exacerbating fears of a protracted slowdown. Imports of key commodities like vegetable oils, rare earths, and fertilizers fell significantly, though some categories such as crude oil, coal, and copper saw volume increases due to lower global prices.
China’s trade surplus grew to $97.44 billion in November, up slightly from $95.72 billion in October. While this may seem like a positive development, it reflects an imbalance driven more by shrinking imports than robust export growth.
Amid these challenges, Beijing has signaled plans to intensify its stimulus measures. Top leaders have vowed to adopt more accommodative monetary and fiscal policies in 2025, aiming to boost domestic demand and revive consumer spending.
Key policy recommendations for next year include maintaining a growth target of around 5% and implementing substantial fiscal support. In September, China’s central bank unveiled aggressive monetary easing measures, including interest rate cuts and a 1 trillion yuan ($140 billion) liquidity injection.
While these steps have begun to show some impact—manufacturers reported improved business conditions in November—they have yet to translate into significant export growth. Many manufacturers also reported fewer export orders, underscoring the challenges ahead.
The current trade tensions and economic slowdown have reignited calls for China to reduce its reliance on exports and pivot toward domestic consumption as a growth driver. Policymakers are now expected to prioritize the consumer sector in 2025, shifting focus from the export-oriented manufacturing sector.
Government advisors argue that boosting domestic demand is crucial for cushioning the impact of U.S. tariffs and navigating a volatile global economic landscape. Investments in infrastructure and industrial commodities are expected to play a significant role in this strategy, as robust fiscal expenditure could drive demand in these sectors.
“Robust fiscal expenditure, much of it likely directed toward investment, should boost demand for industrial commodities in the coming months,” noted Capital Economics’ Huang.
Looking ahead, China’s economic prospects remain uncertain. While imports are expected to recover in the coming months due to expanded fiscal support, external risks like U.S. tariffs and European trade tensions loom large.
Trump’s return to the White House introduces an additional layer of unpredictability, as his administration is likely to adopt a hardline stance on trade. The potential for tariffs exceeding 10% on Chinese goods could significantly impact the country’s export-driven growth model.
China’s policymakers are set to meet this week to finalize key economic targets and policy directions for next year. Investors and analysts will closely monitor these developments for indications of how Beijing plans to navigate the dual challenges of domestic economic weakness and external trade pressures.
