(CNBC): For the month, exports decreased 6.1 percent on-year in dollar-denominated terms, compared with a 0.1 percent increase in the previous month, Reuters reported on Friday, citing official data. Imports meanwhile rose 3.1 percent from a year ago, down from November’s 6.7 percent growth. December’s trade balance stood at $40.82 billion, versus $44.61 billion in the previous month
For 2016, Chinese exports dropped 7.7 percent on-year, the worst fall since 2009, according to Reuters. Imports declined 5.5 percent. That left the world’s second-largest economy with a 2016 trade surplus of $509.96 billion. In yuan terms, 2016 exports dropped 2 percent on-year, while imports picked up 0.6 percent. Rising costs and weakening advantages in low-end sectors will hinder China’s foreign trade performance this year, warned a spokesperson from the customs department, Reuters said. But the country can handle the challenges, the spokesperson continued.
Friday’s trade figures came against the backdrop of renewed gyrations in the Chinese yuan this year, which have revived concerns over capital outflows. In the wake of U.S. president-elect Donald Trump’s win, the yuan fell to nearly eight year lows against the dollar, touching its weakest level since January 2009, amid renewed strength in the dollar. A weaker currency makes Chinese products more attractive in overseas markets, and the recent plunge helped explain November’s strong export performance. But the past week has been a turbulent one for the Chinese currency, which first weakened, then unexpectedly rose before retracing gains.
China’s export growth will be limited if Trump unveils protectionist measures, Reuters quoted Chinese officials as saying on Friday. “China is the biggest loser in the anti-globalization trend,” officials noted. Global protectionism is on the rise and will enhance trade risks going forward, he noted. Because Beijing has been one of the biggest winners of globalization, the government is concerned about Trump’s administration.