CHINA is expected to post stronger export and import growth in December, helped by a rebound from a low base, a recent poll showed, signaling a modest recovery in demand as China and Washington step closer to ending their trade dispute.

Exports by the world’s second-largest economy likely rose 3.2 percent in December from a year earlier, according to a median estimate from the survey of 31 economists, improving from a 1.3 percent drop in November and marking the first pickup since a 3.3 percent rise in July.

Imports are forecast to have jumped 9.6 percent from a year earlier in December, the strongest pace since October 2018, the poll showed.

Goldman Sachs analysts said the turnaround was due mainly to low base and a more visible effect of front-loading of exports last month.

Higher commodity price inflation also helped boost the value of imports, analysts said.

The stronger imports also denoted a pickup in domestic demand, as suggested by China’s latest official factory activity survey, they said.

Overall sentiment improved last month after China and the United States reached a Phase One deal, which is expected to cut tariffs and boost Chinese purchases of U.S. farm, energy and manufactured goods.

However, analysts say the risks of further complications and a re-escalation of trade tensions remain, despite the preliminary deal.

“The risk of trade relations deteriorating again and tariffs ‘snapping back’ is substantial,” said Louis Kuijs, head of Asia economics at Oxford Economics.

Economists with Nomura forecast China’s export growth could continue to face strong headwinds amid still-high U.S. tariffs and sluggish external demand.

Despite growing strains on the economy, China remains reluctant to implement major stimulus for worries of heightening financial risks.

China’s growth has cooled from 6.8 percent in 2017 to 6 percent in the third quarter of 2019, the slowest since the early 1990s.

On New Year’s Day, the People’s Bank of China announced it was cutting the amount of cash that all banks must hold as reserves. It is the eighth time since early 2018 the central bank has reduced banks’ reserve requirement ratio (RRR) to free up more funds to shore up the slowing economy.

“Depending on growth in coming months, RRRs may be lowered somewhat more, and interest rates too. But we don’t expect significant further monetary easing,” said Oxford Economics Louis.(SD-Agencies)