China’s exports posted the first full-year decline since 2016 as global demand faltered and prices fell, hurting a major pillar of growth for the world’s second-biggest economy. 

The country sold $3.38 trillion worth of goods to the rest of the world last year, a 4.6% drop from the record a year earlier. Shipments had soared during the pandemic as people stepped up purchases as they worked from home, but demand from Europe, the US and elsewhere faded as interest rates rose. 

Full-year imports fell 5.5%, leaving a surplus of $823 billion for the year.

China is facing pressure on trade, with weakness in many of its trading partner economies and geopolitical tensions making a reprieve unlikely soon. At home, its property sector remains imperiled and deflation fears are mounting, leading economists to call for more policy support from the government. 

The sustained deflation is dragging down the value of Chinese exports and making them cheaper for foreign consumers. The index of export prices in October hit the lowest in data going back to 2006.

For the month of December, China’s exports in dollar terms rose 2.3% from a year earlier while imports expanded 0.2%, leaving a surplus of $75 billion. The rosier December data was likely helped by more favorable comparisons with a year ago, when shipments tumbled due to the effect of Covid-19 running rampant across the country. 

There are some early signs of a rebound in global trade, with South Korean exports rising 5.1% in December and global sales of semiconductors returning to growth in November after falling for more than a year.