Economists expect Chinese exports to hit historic highs this year as customers rush to bring forward their orders amid President-elect Donald Trump’s threat of higher tariffs when he takes office in January.
Export growth will accelerate to 7% in the last three months compared to the same period last year, according to the average forecast of analysts surveyed by Bloomberg November 15-21. That’s up from the 5% gain in October before the U.S. election and would take total exports this year to $3.548 trillion – above the previous record set in 2022.
“In the next few months, Chinese exports could benefit from panicked stockpiling by foreign companies,” said Erica Tay, an economist at Maybank Investment Banking Group. “The specter of a trade war will likely prompt China’s policymakers to focus more on pro-consumption measures next year.”
Exports started this quarter with the strongest growth since July 2022This puts China on track for a record trade surplus that could reach almost $1 trillion this year. Beijing continues to rely on overseas sales to offset weakness in domestic demand, even as authorities reversed course with pumping measures in recent weeks Impulses for the economy.
During the campaign, Trump threatened to increase tariffs on Chinese goods to as much as 60%, a level that Bloomberg Economics predicts would decimate trade between the world’s two largest economies. During his first term, Trump imposed tariffs of up to 25% on more than $300 billion in Chinese supplies – prompting retaliation from Beijing – and President Joe Biden has largely kept those tariffs in place.
The prospect of an expanded trade war following Trump’s return to the White House is raising expectations for major stimulus next year as China prepares for a new era of protectionism. In contrast to booming exports, import growth has stagnated as the domestic economy struggles to recover, prompting a global backlash from countries fearing the flood of cheaper Chinese goods.
China’s gross domestic product is expected to grow 4.9% in the fourth quarter, compared with the 4.8% forecast last month, a Bloomberg survey showed.
Economists polled by Bloomberg expect China’s reduction in the reserve requirement ratio by 25 basis points in the fourth quarter will free up money for banks to lend while keeping key interest rates such as the seven-day reverse repo stable through next year. Expectations are unchanged from the October survey.
The central bank last cut the reserve requirement ratio in September, shortly after Governor Pan Gongsheng announced a series of aggressive steps to limit China’s slowing growth. Last month, Pan reiterated the people’s opinion Bank of China Depending on liquidity conditions in the market, the ratio may be reduced by a further 25 to 50 basis points by the end of the year.
“We expect a larger tariff shock compared to 2018-2019, but China is now less dependent on the US, has developed a response scheme – including devaluing the yuan – and will provide stimulus,” said Arjen van Dijkhuizen, senior economist at ABN Amro Bank NV.