In response to economic challenges, China's leadership is set to implement looser monetary policies and proactive fiscal measures in 2025 to stimulate domestic demand and counter external pressures.

China's exports surged by 10.7% year-on-year in December 2024, exceeding economists' expectations of 7.3%, while imports saw a modest increase of 1.0%, marking the strongest growth since July 2024.

The country's total trade reached a record 43.85 trillion yuan (approximately $6 trillion), reflecting a 5% increase from the previous year.

However, top leaders are cautious about aggressive stimulus measures due to fears of deflation and the need to prepare for the repercussions of U.S. tariffs.

China faces the risk of experiencing 'lost decades' similar to Japan's economic stagnation since the 1990s, characterized by an aging population and weak consumer demand.

Despite these positive trade figures, concerns loom over the potential impact of the upcoming U.S. presidency, as designated President Donald Trump has indicated plans for further tariffs on Chinese products.

Despite impressive export figures, the Chinese economy is grappling with significant challenges, including a third consecutive year of declining corporate profits, which fell by an average of 4.7%.

Factory activity in China showed modest expansion for the third consecutive month, with recovery noted in the services and construction sectors as of December.

Global demand for Chinese products, particularly electronic components, has helped offset weaknesses in domestic demand, although future trade gains may be limited due to anticipated tariffs.

Experts argue that while strong exports and eased macroeconomic policies may stabilize economic momentum, more direct fiscal measures are necessary for sustained growth.

While China aims to boost imports, current growth is hindered by lower commodity prices and trade restrictions from other nations, particularly the U.S.

The upcoming national congress is expected to clarify China's strategies for addressing economic vulnerabilities amid potential trade conflicts.