In the first two months of 2025, China's trade balance has significantly widened, driven primarily by a notable drop in imports, as per the figures released by the official Customs Administration on Friday. The data reflects the combined performance for January and February, taking into account the timing of the lengthy Lunar New Year holidays, which can distort monthly statistics. During this period, China's exports saw a modest rise of 2.3% year-on-year, totaling $535.58 billion.
In contrast, imports fell by 8.4%, amounting to $366.8 billion, leading to an impressive trade surplus of $172.50 billion for the first two months of the year. The recent decline in imports may be indicative of sluggishness in China's domestic economy, while the relatively slow growth in exports raises concerns amidst escalating international trade tensions, particularly between Beijing and Washington. ING Think, a division of the Dutch investment house, commented, "China's trade data points to a weak start for 2025." They highlighted that this data offers the first substantial insight into early trade performance for China this year. Despite the overall slowdown, there were notable positives within the export figures.
Shipments of semiconductors surged by 11.9% year-on-year in January and February. Additionally, automatic data processing equipment exports rose by 10.5%. However, not all sectors fared well, as furniture exports declined by 15.5%, toy shipments fell by 11.1%, shoe exports were down 18.3%, and apparel sales decreased by 6.9%, according to ING Think.
In examining exports specifically to the United States, China saw a 2.3% increase year-on-year during this two-month period, which some analysts suggest may reflect a strategy of "front-loading" shipments prior to the introduction of new tariffs. This increase stands in stark contrast to China's declining exports to the European Union, which fell by 0.6% year-on-year; exports to Japan decreased by 0.7%, shipments to Korea dipped by 2.6%, and those to Russia plummeted by 10.9%. On the import side, ING Think pointed out that "commodities imports generally contracted over the first two months of the year," highlighting decreases in key commodities: crude oil imports dropped by 10.5% year-on-year, natural gas fell by 13.8%, and steel imports decreased by 7.9%. Given the prevailing trade dynamics, the outlook for China's trade and exports in 2025 suggests that Beijing may need to focus more on stimulating domestic consumption to enhance the nation's gross domestic product (GDP).
ING Think opined, "It is likely that after driving growth in 2024, the external environment will be less supportive this year. This intensifies pressure on Beijing policymakers to boost domestic demand, aiming to meet this year's GDP growth target of 5%.".