BEIJING: China's exports rose for the first time in five months in December and by more than expected, signaling a modest recovery in demand as Beijing and Washington agreed to defuse their prolonged trade war.
The world's largest economies are set to sign a Phase 1 trade deal on Wednesday, marking a significant de-escalation but not an end to a dispute that has rattled financial markets and weighed heavily on global business confidence.
China's December exports rose 7.6per cent from a year earlier, customs data showed on Tuesday. The median forecast from a Reuters poll of analysts had been for a 3.2per cent rise in shipments, following November's 1.3per cent drop.
Imports also surpassed expectations, jumping 16.3per cent from a year earlier and boosted in part by higher commodity prices. The Reuters poll had forecast 9.6per cent growth versus 0.5per cent in November.
While comparisons with a weak December last year flattered both figures, they also pointed to improving demand, both globally and in China, analysts said.
China posted a trade surplus of US$46.79 billion in December, compared with the poll's forecast for a US$48 billion surplus, up from November's surplus of US$37.93 billion.
For all of 2019, its exports proved remarkably resilient to trade tensions, rising 0.5per cent, while imports fell 2.8per cent.
China's trade surplus with the United States for December stood at US$23.18 billion, according to Reuters calculations based on customs data, down from November's surplus of US$24.60 billion.
China exports to the United States fell 12.5per cent in 2019, compared with a rise of 11.3per cent in 2018. Imports from the United States fell 20.9per cent, versus a 0.7per cent rise in the previous year.
Overall sentiment improved last month after the two sides reached the Phase 1 deal, which is expected to cut tariffs and boost Chinese purchases of U.S. farm, energy and manufactured goods while addressing some disputes over intellectual property.
China's Vice Premier Liu He is in Washington from Jan. 13-15 to sign the interim agreement.
However, analysts say the deal does not spell the end of trade tensions and the risk of further complications and re-escalation remains.
"Our judgment is Phase 1 will not put an end to Trump Trade Wars," analysts with MUFG Bank wrote in a research note prior to the data.
(Reporting by Gabriel Crossley and Lusha Zhang; Editing by Kim Coghill)