Chinese trade slumps amid US sanctions, economic slowdown

Chinese trade slumped in December, an unexpected fall in both exports and imports underlined the impact of the trade war and economic slowdown.

Exports from China fell 4.4% last month compared with the year before, while imports fell 7.6%. Both were the worst result since 2016 and left a trade surplus of $57.1 billion.

The figures indicate a further weakening in the strength of the world's second-biggest economy and sent Asian stock markets lower on Monday.

China ended 2018 on a soggy note, with factory gauges entering the contractionary territory, producer prices closer to deflation, and a drop off in the front-loading of shipments that had seen companies race to beat tariff increases.

The downbeat trade data reignited concerns over global growth, weighing on regional equity benchmarks and currencies tied to China’s fortunes, such as Australia’s and New Zealand’s.

China's success in selling its products overseas has particularly irked US President Donald Trump, who has initiated a trade war with China to try to hold back exports.

This prompted companies to push through exports to try to beat the introduction of tariffs, so-called "front-loading".

Negotiators from China and the U.S. expressed optimism after mid-level talks wrapped in Beijing last week, bringing some temporary relief to global investors.

Chinese Vice Premier Liu He is scheduled to visit the U.S. for the next round of talks in late January, but a pathway to a lasting resolution remains unclear.

China’s policymakers have rolled out measures to support the domestic economy including more accommodative monetary and fiscal policies, as evidence mounts of the worsening slowdown.

Stabilizing trade is one of the goals the leadership set for 2019, on top of supporting employment, investment, and the finance sector.

For the whole of 2018, exports rose by 9.9 percent in 2018 in dollar terms to $2.48 trillion, while imports surged 15.8 percent last year, leaving a trade surplus of $351.8 billion, the customs administration said Monday.

The surplus with the U.S. rose more than 17 percent to $323.3 billion in 2018, driven by an 11 percent jump in exports and flat imports.