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China's imports surge past expectations in December 2019

China recorded a larger-than-expected annual rise in imports during the final month of 2019, when the country reached an initial trade deal aimed at diffusing monthslong tensions with the U.S., customs data showed.

The country's imports jumped 16.3% in annual U.S. dollar terms in December 2019, far exceeding the 2.4% consensus estimate of economists polled by Econoday. Exports rose 7.6%, below market expectations of an 8.5% rise, yielding a trade surplus for the month of $46.8 billion, compared with $38.7 billion in November 2019.

The U.S. and China are widely expected to sign "phase one" of their trade agreement Jan. 15. The U.S. Treasury Department said in the evening of Jan. 13 that it was dropping its designation on China as a currency manipulator, adding that the initial trade deal contains "enforceable commitments" from Beijing to "refrain from competitive devaluation" of the yuan.

In yuan terms, China's December 2019 exports rose 9% year over year to 1.67 trillion yuan, while imports increased 17.7% to 1.34 trillion yuan. Julian Evans-Pritchard, senior China economist at Capital Economics, said the "modest improvement" in imports could be due to higher import prices instead of stronger import volumes, adding: "As such, it would be premature to conclude that there has been a marked pick-up in domestic demand."

"Any step up in imports from the U.S. as a result of the trade deal will probably come at the expense of imports from elsewhere," Evans-Pritchard added.

For full year 2019, the country's trade surplus grew 25.4% in local-currency terms to 2.92 trillion yuan as exports rose 5% to 17.23 trillion yuan, while imports increased 1.6% to 14.31 trillion yuan.

China's total trade with its largest trading partner, the European Union, increased annually by 8.0% to 4.86 trillion yuan. The Association of Southeast Asian Nations was China's second-biggest trading partner in 2019, with total trade growing 14.1% to 4.43 trillion yuan.

China's total trade with the U.S. declined 10.7% to 3.73 trillion yuan.

As of Jan. 13, US$1 was equivalent to 6.89 Chinese yuan.