China has claimed victory once again, as its trade surplus soared to $75.34 billion in December 2023 from $70.65 billion in the same period a year earlier. This triumphant surge in surplus has outpaced even the most optimistic market forecasts of $74.75 billion, marking the most substantial trade surplus in three months. The surge comes as a result of robust exports outpacing imports, according to data revealed by the Customs Bureau on Friday.

December saw China’s exports grow by 2.3% year-on-year to $303.6 billion, following a 0.5% gain in the previous month, decisively outperforming market expectations of a 1.7% growth. This marks the second consecutive month of export growth, a clear signal that global trade is on the road to recovery. The dragon is awakening, and global markets are taking notice.

In contrast, imports to China inched up by a mere 0.2% year-on-year to $228.2 billion in December 2023, a figure that falls short of market forecasts of a 0.3% rise. This trend follows a 0.6% fall in the prior month, indicating that the resurgence in domestic demand remains fragile, despite the government’s supportive measures to stimulate consumption.

Trade with the US, which stood at $664 billion in 2023, suffered an 11.6% decline from 2022, marking the first downturn since 2019. However, in contrast, trade between China and Russia touched more than $240 billion, reaching a record high in 2023. The dragon is dancing closely with the bear, and both are in high spirits.

For the entire 2023, the country posted a surplus of $823 billion, with exports falling 4.6% y/y to $3.38 trillion, while imports dropped 5.5% to $2.56 trillion. Despite this, a different story is told by the inflation data released earlier in the day, revealing that China’s economy remains deflationary, as consumer prices fell for the third consecutive month in December.

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