CHINA’S poorer-than-expected trade figures in December partially proved earlier concerns in the market — that rush orders by US importers seeking to avoid tariff increases on Chinese products would have repercussions.

In US dollar terms, Chinese exports last month were down 4.4% year-on-year, the worst in two years, according to statistics from the General Administration of Customs. At the same time, imports dropped 7.6%, the sharpest fall since July 2016.

A closer look at the customs report shows that exports to the US in December fell 3.4% from the year-ago period to $40.3bn.

With the traditional slack season and China’s Lunar New Year in February, a bleak first quarter, if not first half, of this year is probably inevitable for container shipping carriers and terminal operators on transpacific trade.

The flipside of this is that the worse China’s economic data looks, the stronger Beijing will feel about the need for a truce in its trade war with Washington.

The optimistic tone, struck by negotiators from both sides following their latest meeting in Beijing, seems to be a portent of positive results.

But aside from the geopolitical disruption, what worries people more is perhaps a sinking global trade along with a slowing world economy.

The US economy is expected to slow down this year, with some even predicting a recession by 2020. The National Retail Federation and Hackett Associate in its recent report forecast declining container imports in the coming months and an overall weakness for the first half of the year.

Consumer appetite in other developed economies appears to also have softened.

China’s exports to the Netherlands, Italy and France fell 11.1%, 6.2% and 5.3% respectively in December, while those to the European Union as a whole sustained flat growth to $37.6bn, the customs data indicated. Outbound trade to Japan slid 1% as well.

“The recent negotiation between high-level officials from China and the US is expected to ease the trade tension,” Li Chao, chief macro analyst at China’s Huatai Securities, said in a note. “But with the possible deceleration of the global economy and the lagged effect from the Sino-US trade conflict, we’re still not optimistic about China’s export growth in future.”

Meanwhile, the disappointing inbound trade, a reflection of China’s muted domestic demand, has cast a shadow over dry bulk shipping, at least for iron ore carriers.

The 5% year-on-year drop in iron ore imports in December has added to the downbeat mood in the sector, with the full-year results standing at a 1% contraction — the first annual decline since 2010.

The China Metallurgical Industry Planning and Research Institute, a government consultancy, predicted last month that consumption of iron ore (above 62.5% Fe) in the country would fall 4.9% to 1.15bn tonnes in 2019, amid waning steel demand in the property, automobile and energy sectors.

“The situation with iron ore is worrying,” brokerage Banchero Costa told Lloyd’s List in an email, adding that the pessimistic sentiment in China’s real estate markets did not bode well for the commodity’s prospects.

However, the oil and gas sector has managed to buck the downwards trend.

Imports of crude oil jumped nearly 30% on the year to 43.8m tonnes, while those of liquefied natural gas increased almost 17% to 923 tonnes.

Washington is keen to sell these two US-produced energy sources to China. In any bilateral trade agreement between the two countries, Beijing is more likely to want to comply with this rather than, say, compromise on its ‘Made in China 2025’ strategy.

If this materialises, it will be good news for owners of very large crude carriers and LNG carriers.