A recent Reuters poll reveals that China’s trade activity is expected to have improved during December, on the back of a rise in both exports as well as imports, an encouraging sign that points to an improvement in US-China trade relations. Economists expect exports to have grown by 3.1% YoY while imports are expected to have risen by 9.6% YoY during December.

The figures correspond to the fastest pace of growth in exports seen since July while imports would have grown at the fastest pace since October 2018. Higher inflation in commodity prices as well as stronger demands are among the key reasons for a pick-up in Chinese imports.

The mood in global markets has improved significantly after the US and China confirmed that they were ready to sign the phase one trade deal during mid-December. The partial trade deal will be signed later this week, and will mark the first concrete step towards progress in dissipating the trade war sentiment which has built up over the past 18 months.

However, economists express caution that a growth in Chinese exports could remain under pressure over higher US tariffs which persist on some goods as well as weak overseas demand. China is expected to lower its economic growth target for 2020 to around 6% in the wake of continued trade tensions.