Photo by mali maeder
China’s exports experienced a modest increase of 2.3 percent in January and February compared to the same period last year, falling short of expectations, while imports saw a decline exceeding 8 percent, marking a sluggish beginning to a year fraught with uncertainties regarding US tariffs and other policies. Economists had predicted a 5 percent year-on-year rise in exports and a slight increase in imports. Consequently, China’s overall trade surplus expanded to $170.52 billion during the initial two months of the year.
Typically, China’s customs agency releases combined trade statistics for January and February to mitigate any distortions caused by the Lunar New Year holidays. The growth in exports slowed during the first two months of 2025, as the anticipated boost in demand from tariff front-running proved less significant than expected, according to Julian Evans-Pritchard of Capital Economics.
Chinese officials have criticized the tariff increases but remain optimistic about the economy’s resilience, asserting that trade with other nations could offset any declines in exports to the US following the implementation of the tariffs. They have also indicated a willingness to engage in discussions on a basis of mutual respect.
Last year, exports played a crucial role in helping China achieve its economic growth target of 5 percent. The government has once again set a target of approximately 5 percent, despite the uncertainties surrounding this year’s trade outlook. Exports to the US rose by 2.3 percent year-on-year in January and February, while shipments to the European Union and Japan increased by only 0.6 percent and 0.7 percent, respectively. In contrast, exports to Russia declined by 10.9 percent. Evans-Pritchard noted that the decrease in imports indicates that the surge in demand resulting from government stimulus spending late last year has already begun to wane.
This week, the second of two 10 percent tariff increases on imports from China, implemented by US President Donald Trump, took effect, which is likely to adversely impact Chinese exports in the coming months. To some extent, both buyers and Chinese suppliers had expedited their transactions to avoid the impending increases in import duties.
The Association of South-East Asian Nations (ASEAN) continues to be China’s largest trading partner, with exports increasing by 5.7 percent compared to the previous year. Although it is premature to draw significant conclusions from a few months of data, the detailed analysis raises concerns regarding the potential export trends as tariffs begin to affect the United States, according to Lynn Song from ING Economics in a recent report. With tariffs set to be implemented in February and March, it is anticipated that their effects will become more apparent over the following months, she noted.
