By Ambar Warrick
Investing.com -- China’s trade surplus grew more than expected in December, data showed on Friday, as both exports and imports shrank less than expected as easing anti-COVID restrictions aided economic activity.
China’s trade balance grew to a surplus of $78 billion in December, data from the Customs Administration showed. The figure was higher than expectations of $76.2B, as well as last month’s reading of $69.84B.
Exports shrank 9.9% from last year, slightly less than expectations for a drop of 10%, but more than November’s decline of 8.7%. The reading came as Chinese producers still struggled with COVID-related disruptions in the country, as well as sluggish global demand for Chinese goods.
While the Chinese government has now largely pivoted away from its draconian zero-COVID policy, China is grappling with its worst-yet outbreak of the virus, which is expected to delay a bigger economic recovery in the country.
Still, Chinese imports fell 7.5% from last year, largely ducking analyst forecasts for a drop of 9.8%, and better than November’s decline of 10.6%. The reading shows that domestic demand is seeing some recovery after contracting sharply in 2022.
Inflation data released earlier this week also showed that some facets of the Chinese economy were indeed recovering in the wake of easing COVID-19 curbs. But a weaker-than-expected reading on producer price index inflation, coupled with consumer inflation remaining near lows hit in 2022, showed that a recovery will take time.
Readings for January are likely to present a better picture of the Chinese economy, given that the country reopened its international borders earlier this month after three years of lockdowns.
This has spurred a massive spike in domestic and international travel, which is beneficial to the economy.
The Chinese government also reportedly rolled out more stimulus measures on Friday, which targeted the housing market.
The Chinese yuan reacted positively to the trade data, rising 0.2% and hovering just below a six-month high.