China’s trade surplus exceeds $1 trillion for the first time on growth outside the US
Shipments to the United States fell by nearly one-third from the same month a year earlier.
“Tariff cuts agreed as part of the US-China trade trick did not help boost shipments to the US last month, but overall export growth still rebounded,” said Zichun Huang, China economist at Capital Economics. “We expect China’s exports to remain resilient, with the country continuing to gain global market share next year.”
“The role of trade diversion in compensating for the slowdown due to US tariffs appears to be growing,” she added.
China’s overall exports rose 5.9% year-on-year in November, customs data showed on Monday, reversing a 1.1% decline in October and beating the 3.8% forecast in a Reuters poll.
Imports rose 1.9%, compared with a 1.0% increase in October. Economists had expected a 3.0% increase.
China’s trade surplus was $111.68 billion in November, the highest since June and up from $90.07 billion in the previous month. That was above the estimate of $100.2 billion. The trade surplus exceeded $1 trillion for the first time in 11 months of the year.
China has stepped up efforts to diversify its export markets since Trump won the US election in November 2024 and is seeking closer trade ties with Southeast Asia and the European Union. It has also used the global influence of Chinese firms to create new manufacturing centers for low-tariff access.
Chinese shipments to the United States fell 29% year-on-year in November, while exports to the European Union rose 14.8% year-on-year. Shipments to Australia rose by 35.8% and fast-growing Southeast Asian economies took 8.2% more goods over the same period.
Falling exports to the US came despite reports that the world’s two largest economies agreed to reduce some of their tariffs and a range of other measures after Trump and Chinese President Xi Jinping met in South Korea on October 30.
The average US tariff on Chinese goods is 47.5%, well above the 40% threshold that economists say erodes the profit margins of Chinese exporters.
“The key (for higher exports) seems to be electronic machinery and semiconductors,” said Dan Wang, China director of Eurasia Group. “There is a shortage of lower-end chips and other electronics, which has meant that prices have jumped, and Chinese companies going global are importing all kinds of machinery and other inputs from China.”
KEY MEETINGS AMID US-CHINA TRADE UNCERTAINTY
China’s yuan strengthened on Monday on the back of stronger-than-expected export data, with investors also awaiting political signals from key year-end talks.
The Politburo, the ruling Communist Party’s top decision-making body, pledged on Monday to take steps to expand domestic demand, a move analysts say is crucial to weaning the $19 trillion economy off its dependence on exports.
Top officials are also expected to agree on the annual Central Economic Labor conference in the coming days, which will set key goals and outline policy priorities for the year ahead.
Economists estimate that restricted access to the US market since Trump’s return to the White House has reduced China’s export growth by about 2 percentage points, or roughly 0.3% of GDP.
The unexpected drop in October, after a rise of 8.3% the previous month, signaled that Chinese exporters’ tactic of pre-stocking US-bound shipments to beat Trump’s tariffs had expired.
Although Chinese factory owners reported an improvement in new export orders in November, they were still down, underscoring continued uncertainty among manufacturers as they struggled to replace demand without U.S. buyers.
The official survey, which tracked broader factory activity, showed the sector contracted for the eighth straight month.
DOMESTIC DEMAND STILL SOFT
China’s rare earth exports jumped 26.5% month-on-month in November, the first full month since Xi and Trump agreed to speed up supplies of the critical mineral from the world’s largest refinery.
The country’s soybean imports are also poised for their best-ever year as Chinese buyers, who have shunned U.S. purchases for most of this year, increased purchases from U.S. growers in addition to heavy purchases from Latin America.
Overall, China’s domestic demand remains weak due to a prolonged decline in real estate.
This weakness was reflected in the decline in imports of raw copper, a key material in construction and manufacturing.
“China’s turnaround to establish domestic demand as a key driver of growth will take time, but it is critical for China to move into the next phase of its economic development,” said Lynn Song, ING’s chief economist for Greater China.