In 2024, China recorded a 10.7 percent increase in exports despite looming tariffs from President-elect Donald Trump, indicating strong economic performance. Imports also rose unexpectedly by 1 percent. Economists predict that the anticipated tariffs could significantly impact China’s GDP growth. Nevertheless, analysts believe that the export growth is likely to continue in the near term as businesses proactively adjust to potential tariff challenges.
In 2024, China achieved a remarkable milestone with its exports rising by 10.7 percent compared to the previous year, surpassing economists’ expectations. This substantial increase might serve as a crucial advantage for China’s economy, especially with the shadow of President-elect Donald Trump’s anticipated tariffs looming on the horizon. Despite concerns about potential declines in imports, these too demonstrated resilience with a 1 percent rise, the most substantial growth since July 2024. Analysts suggest that businesses may be preemptively shipping goods to mitigate the effects of the projected tariffs.
Trump’s incoming administration, set to assume office on January 20, promotes a populist economic strategy that emphasizes imposing significant tariffs on Chinese products. Economists warn that such tariffs, potentially reaching as high as 60 percent, could adversely affect U.S. consumers through increased prices and simultaneously threaten the profit margins of Chinese exporters. Experts from UBS estimate that these tariffs could reduce China’s gross domestic product (GDP) growth by 2.5 percentage points within the following year.
The surge in exports is anticipated to persist in the short term, bolstered by companies increasing shipments to avoid impending tariff costs. Zichun Huang, an economist at Capital Economics, remarked on the positive outlook for outbound shipments, attributing it to China’s growing market share supported by a depreciated real effective exchange rate.
Amid these challenges, the Chinese government has implemented aggressive economic measures in response to sluggish growth, including interest rate decreases and eased property purchasing regulations, as the nation struggles to meet its 5 percent GDP growth target. These efforts are critical as China grapples with its slowest growth rates in decades due to a myriad of issues, such as a lingering real estate crisis and decreasing consumer sentiment. On Friday, the government is poised to unveil the GDP data for the fourth quarter and the entirety of 2024, following a recent World Bank report which adjusted China’s growth forecast upward to 4.9 percent for 2024, reflecting a slight improvement from earlier estimates.
The context surrounding China’s export performance underscores a period of economic uncertainty exacerbated by political changes in the United States. The impending assumption of office by President-elect Donald Trump aligns with expectations of aggressive tariff policies aimed at Chinese imports. These tariffs, intended to support U.S. industries, are poised to impact international trade dynamics significantly. Additionally, China’s domestic challenges, including economic slowdowns and demographic shifts, heighten the importance of strong export performances as a stabilizing factor for its economy.
In conclusion, China’s record-high exports in 2024 illustrate the resilience of its economy facing new U.S. tariff threats. While the anticipated tariffs from the incoming Trump administration pose significant risks, current export trends indicate a strong short-term outlook. However, underlying economic challenges persist, necessitating ongoing governmental intervention to maintain growth. The upcoming GDP figures will provide further insights into the overall efficacy of these strategies and the broader economic climate.
Original Source: www.aljazeera.com
