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Economists are cautioning that China’s export growth may slow down or even contract next year due to the tariffs imposed by Donald Trump. This move by the incoming US administration could potentially hinder a vital source of expansion for Beijing.
Chinese exports have increased by approximately 5.4% in dollar terms from January to November compared to the previous year, reaching $3.2 trillion. This growth has been instrumental in boosting overall GDP during a period when authorities have been grappling with a prolonged property market downturn.
However, experts widely predict a deceleration in 2025 as a result of the tariffs, leading many to believe that Beijing will need to enhance its support for the economy.
According to Robin Xing, the chief China economist at Morgan Stanley, “Exports were a significant driver of economic growth in 2024. I believe this contribution will certainly diminish.”
While the exact impact of the tariffs remains uncertain, Goldman Sachs anticipates a 0.9% decline in Chinese exports in US dollar terms next year. Capital Economics also foresees a decrease, while UBS and Nomura expect zero growth in exports.
Various financial institutions, including Morgan Stanley and ING, forecast that exports will continue to increase but at a slower pace than in 2024.
A recent survey of economists conducted by FocusEconomics predicted a mere 2% growth in Chinese merchandise exports in 2025, a sharp decline from the 3.9% forecast just a month earlier.
The potential slowdown in export growth comes at a crucial juncture for the Chinese economy. President Xi Jinping recently emphasized the importance of boosting domestic demand at the annual Central Economic Work Conference, signaling a renewed urgency to stimulate growth.
Data released on Monday revealed unexpected weaknesses in retail sales, further adding pressure on policymakers. In response, Beijing introduced measures in late September to support stock prices and implemented a local government refinancing package last month.
Morgan Stanley’s Xing cautioned that a slowdown in export growth would exacerbate China’s deflation issue.
An official from the National Bureau of Statistics remarked on Monday that the external environment had become “more complex.”
Nomura’s chief China economist, Ting Lu, suggested that the tariffs could begin impacting China’s exports by mid-2025 and expected that front-loading shipments in the fourth quarter would also weigh on growth. In the absence of obstacles like tariffs, Lu projected export growth of 4-5%.
Julian Evans-Pritchard, head of China economics at Capital Economics, indicated that significant tariffs might not be implemented until the second quarter. He believes that exports will remain robust until then but anticipates a steeper decline of 3.5% in 2026.
Beijing faces pressure to achieve its official annual economic growth target of around 5%, a goal that President Xi stated he was “fully confident” in achieving earlier this month.
Goldman Sachs estimates that exports will contribute nearly three-quarters of overall GDP growth in 2024, which they forecast at 4.9%. They anticipate this figure to decrease to 4.5% next year due to the slowdown in export growth.