China trade surplus tops $1 trillion for first time
China’s trade surplus surpassed US$1 trillion ($A1.5) for the first time as manufacturers seeking to avoid President Donald Trump’s tariffs shipped more products to markets outside the US in November and exports to Europe, Australia and Southeast Asia increased.
Shipments to the United States fell by nearly a third compared to the same month the previous year.
“Tariff cuts agreed under the US-China trade truce 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 and the country to continue gaining global market share next year.
“The role of trade redirection in offsetting the hurdle created by US tariffs still appears to be increasing.”
China’s exports increased by 5.9 percent on an annual basis in November; Customs data on Monday showed a reversal of October’s 1.1 percent contraction, above the 3.8 percent forecast in a Reuters poll.
Imports increased by 1.9 percent compared to a 1.0 percent increase in October. Economists expected a 3.0 percent increase.
China’s trade surplus reached US$111.68 billion (US$168.33 billion) in November, its highest level since June, up from US$90.07 billion (US$135.76 billion) recorded in the previous month.
This was above estimates of US$100.2 billion ($151.0 billion).
The trade surplus exceeded US$1 (A1.5) trillion for the first time in 11 months of the year.
Since Trump won the November 2024 US election, China has stepped up efforts to diversify its export markets by seeking to establish closer trade relations with Southeast Asia and the European Union.
It has also leveraged the global footprint of Chinese companies to establish new manufacturing centers for low-tariff access.
While China’s shipments to the United States decreased by 29 percent on an annual basis in November, exports to the European Union increased by 14.8 percent annually.
Shipments to Australia rose 35.8 percent, and fast-growing Southeast Asian economies received 8.2 percent more goods over the same period.
The decline in exports to the US came despite reports that the world’s two largest economies had agreed to cut some tariffs and a range of other measures after Trump and Chinese President Xi Jinping met in South Korea on October 30.
The average U.S. tariff on Chinese goods stands at 47.5 percent, well above the 40 percent threshold that economists say erodes profit margins for Chinese exporters.
“Electronic machines and semiconductors look like the key (to higher exports),” said Dan Wang, Eurasia Group’s China director.
“There is a shortage of low-quality chips and other electronic products, which means prices are rising, and globalizing Chinese companies are importing all kinds of machinery and other inputs from China.”
The Chinese yuan strengthened on Monday, driven by stronger-than-expected export data as investors awaited policy signals from year-end meetings.
The Politburo, the ruling Communist Party’s top decision-making body, vowed on Monday to take steps to boost domestic demand; Analysts say this shift is crucial to shifting the US$19 trillion ($A29) trillion economy away from dependence on exports.
Senior officials are also expected to meet in the coming days for the annual Central Economic Work Conference to set key targets and outline policy priorities for the coming year.
Economists estimate that reduced access to the U.S. market since Trump returned to the White House has reduced China’s export growth by roughly 2.0 percentage points; This corresponds to approximately 0.3 percent of GDP.
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