Chinese export growth slowed from a 19-month high in November, missing estimates in the process and disappointing economists who collectively expected more in the way of a fillip from tariff-related front-loading and holiday stockpiling.

Shipments abroad rose less than 7% last month, Beijing said Wednesday. That was a marked slowdown from October’s near 13% expansion which counted as the briskest pace since March of 2023. Consensus saw an 8.5% gain.

The narrative hasn’t changed. China’s grappling with a deeply entrenched domestic demand slowdown which threatens to instill in consumers a deflationary mindset. Exports are about the only thing Beijing has going for it economically. Xi’s leaning hard on that crutch, to the chagrin of a Western political center struggling to cope with a delayed electoral reckoning nearly a quarter century on from China’s WTO accession.

Xi’s plan, if you can call it that, is to export his way out of a self-inflicted economic quagmire. Trump’s plan, if you can call it that, is to correct for three decades of no-guardrails globalization with draconian tariffs. What could go wrong, right?

As the figure shows, imports shrank again last month in China. The 3.9% drop was a big downside “surprise,” with the scare quotes to denote that exactly nobody should be surprised. Again: This is an economy struggling with moribund domestic demand, and the government’s reluctant to countenance demand-side stimulus.

It’d be a mistake to make too much of the marginal disappointment on the export growth readout. China notched a $97.4 billion surplus in November and exports to the US were the highest in absolute terms in over two years. Shipments abroad will likely stay a semblance of buoyant for a few more months as buyers around the world make every effort to get what they need from China’s factories before “Tariff Man” ratchets up what already counts as an adversarial US trade policy vis-à-vis Beijing. Remember: Joe Biden didn’t backpedal on Trump’s “tough on China” stance. If anything, the outgoing administration dialed the pressure higher.

“Before any formal tariff announcements, we will likely see export front-loading over the coming months amid tariff uncertainty [t]hen, upon implementation, which could be as soon as Q3 2025, we expect to see a plunge in exports and some spillovers to manufacturing investments,” SocGen’s Wei Yao and Michelle Lam said.

The table, from SocGen, suggests that in a worst-case scenario that finds Trump upping the ante to 60% “in one go,” China could suffer a GDP shock of 2ppt, “with the negative impact equally split between exports (directly) and domestic demand (indirectly) via manufacturing jobs and consumption,” Wei and Lam noted.

Needless to say, the poor imports showing in Tuesday’s data suggested recent stimulus efforts are falling flat, what with the country’s “lifeless” youth and “despairing” middle-aged. Markets will await more stimulus clues later this week, after officials meet for the Central Economic Work Conference, a closed-door affair where top leaders commiserate, scheme and pretend it’s possible to centrally plan the economic lives of 1.4 billion people.

The trade spat is by now inseparable from national security. The US justifies all manner of trade and investment restrictions on China by way of security concerns, and reports this week indicated China’s restricting — or will soon restrict — the sale of key drone components to the US and Europe, another backdoor bid to assist Russia’s war effort in Ukraine. Last week, China banned the sale of dual-use technology to the Pentagon, and in a new development, indicated the rules apply not just to domestic companies, but to those abroad as well. In short, Xi’s trying to replicate America’s long-arm policies.

The problem for China’s straightforward, and I touched on it here Monday evening: The Party’s domestic political legitimacy is inextricably bound up with the leadership’s ability to provide for steady quality-of-life gains for everyday Chinese. That’s the unwritten social contract, and Xi’s arguably in breach of it. A lot of Chinese didn’t sign up for his quest to supplant the US as global hegemon, and to the extent that effort’s undermining China’s economic fortunes, it’s insult to injury for a populace still reeling from a bungled property crackdown and struggling to reconcile Xi’s “common prosperity” social engineering program with the increasingly poor outcomes it’s producing.

America may be losing its democracy, but China doesn’t have one in the first place, and while autocracies can be efficient given they don’t need to seek consensus when it comes to policymaking, that doesn’t matter if the policies are bad. Xi’s policies are bad, and getting worse all the time.

Beijing needs to do something right now to bolster consumer confidence, resuscitate domestic demand and, crucially, restore a sense of hope among the country’s young adults. If they don’t, and the trade environment deteriorates, becoming even more hostile to China’s export-dependent growth model than it already is, Xi’s going to have a restive populace on his hands. That’s a far bigger problem than any foreign policy quandary.